The deadline for a major milestone of the National IT Programme has been missed.

The Department of Health last week said Computer Sciences Corporation had missed its deadline to install the Lorenzo 1.9 integrated record system at University Hospitals of Morecambe Bay Trust by the end of March.

CSC is in the last chance saloon and has got to put in place a remedial programme

DH director general for informatics Christine Connolly told HSJ she had refused to sign renegotiated contracts with the company, worth about £3bn of the troubled £12bn national IT programme. She said if CSC could not now put forward a convincing plan for Morecambe Bay, it could lose its contracts for all hospitals in the North, Midlands and East of England.

She told HSJ: “Given they have not delivered, that obviously affects our confidence.”

Independent NHS IT consultant John Cruickshank, who last month published a report for think tank on how to reform the programme, called the DH decision sensible.

He said: “CSC is in the last chance saloon and has got to put in place a remedial programme.”

But he said the DH’s proposed alternative - for trusts to pick other, generally less comprehensive, systems - was “not thought through”.

However Ms Connolly said that approach was already well received in the south.

She has signed a renegotiation of BT’s contract for the programme in London.