THE proposals for foundation hospitals, put forward by Health Secretary Alan Milburn, would free the best-performing hospitals from Whitehall control and allow them to borrow and pay more to attract the best staff.

Mr Milburn has said he would welcome applications from top-ranked hospitals, particularly those in deprived areas.

The recently merged Burnley and Blackburn trusts were both given the highest three-star rating in the last Government league tables and both areas have large pockets of social and economic hardship.

Although local health chiefs say they are concentrating on the merger for the immediate future, if the proposals go ahead the Government is aiming at making all hospitals foundation hospitals over the next five years.

Supporters say the move will allow hospitals the flexibility they need to better serve the needs of the local population.

Darwen and Rossendale MP Janet Anderson said: "We need to do everything we can to improve the NHS - we can't continue to run it centrally. I hope all hospitals are foundation hospitals one day."

Hyndburn MP Greg Pope said he understood the concerns of opponents but was in favour of foundation hospitals to experiment with different ways of running the NHS.

Mr Milburn was so impressed by a foundation-style hospital on a trip to Madrid, he immediately wanted to replicate the idea in the UK.

He said this was "a new model of public ownership, firmly rooted in the cooperative and mutual tradition".

He said foundation trusts would be owned and controlled by local communities, rather than central government or shareholders. "They will be not-for-profit organisations, wholly part of the NHS, subject to NHS standards and inspections, but no longer directed from Whitehall."

He has the backing of the Prime Minister Tony Blair, although Chancellor Gordon Brown is said to be less keen on the idea.