HEALTH chiefs today admitted they hadn't considered applying for controversial "foundation" status -- because they were too busy planning their own merger.

The proposals by Health Secretary Alan Milburn would free the best-performing hospitals from Whitehall control, 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.

Thirty-two trusts have made bids to the Government for foundation status which Mr Milburn has trumpeted as a 'third way' for the NHS, but opponents, including more than 120 Labour MPs, claim it would create a two-tier health service and widen inequalities.

But chairman of the new East Lancashire Hospitals Trust Christine Kirk said their main focus was on managing the merger, which happened on April 1, and making sure the two organisations knit together.

She said: "I would not rule it out in future but at the moment our focus is not towards it."

Dill Eccleston, of the committee representing 13 unions on the Blackburn hospitals site, agreed: "With the merger and the single site project in the offing there's already enough going on at the moment."

East Lancashire's Labour MPs are split on the issue which will be debated in the Commons next Wednesday and could even bring an embarrassing defeat for the Government.

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 was in favour of foundation hospitals to experiment with different ways of running the NHS while Burnley MP Peter Pike said he was undecided on the issue and may abstain on Wednesday.

Pendle MP Gordon Prentice, however, said: "It will create a two-tier NHS and was not in the manifesto. There is strong opposition within the Parliamentary Labour Party which cannot be dismissed."