The proposed £460m new North Tees and Hartlepool hospital has been axed by the government, as part of a spending review.

The Wynyard Park project is one of 12 proects across government that have been cancelled altogether and a further 12 that have been suspended.  The review looked at spending decisions taken since 1 January.

Chief secretary to the Treasury Danny Alexander said the projects had been cancelled “where they were not affordable, did not represent good value for money, or where they did not reflect the government’s priorities”.

The new hospital at North Tees and Hartlepool Foundation Trust was intended to replace existing hospitals in Hartlepool and Stockton-on-Tees. The outline business case for the £464m project was given approval by the Treasury in March.

However, two months earlier, health secretary Andrew Lansley, in his former role as shadow health secretary, visited the area and, according to a local paper, pledged to “save” the existing hospital in Hartlepool.

Mr Alexander said: “As a result of the poor decisions made by the previous government, I have taken the decision to cancel certain projects that do not represent good value for money, and suspend others pending full consideration in the spending review.”

Other health projects cancelled by the Treasury are the £2m Active Challenge Routes, part of the Walk England initiative, and £6m County Sports Partnerships.

Additionally, two projects have been suspended pending a further review. These are the £73m Health Research Support Initiative and the £50m Leeds Holt Park Well-being Centre.

North Tees and Hartlepool NHS Foundation Trust chief executive Alan Foster said: “Naturally we’re disappointed but we welcome the Department of Health’s offer to work with their officials on other options.”