BOSSES at St Helier Hospital remain "absolutely committed" to £219m redevelopment plans, despite the collapse of a potential merger with a London health trust.

St George's Hospital, in Tooting, had made a formal bid to merge with Epsom and St Helier NHS Trust.

But just two months later, St George's this week blamed the "level of financial challenge" facing hospitals in south west London as it announced the U-turn.

It had been hoped a partnership would allow the new combined body to achieve Foundation Trust status, giving them more control over their finances.

Despite the withdrawal of St George's, the Epsom and St Helier Trust insists the landmark £219 million redevelopment of St Helier Hospital will still go ahead.

Chief executive Matthew Hopkins said: "The Government has been very clear that this money is set aside for us to spend.

"The redevelopment of St Helier is long overdue and marks the single biggest investment in healthcare in the area for a generation."

Mr Hopkins added: "We have already spent more than £5m on the project and look forward to beginning the move of services and staff from the areas that are due to be demolished, prior to the work taking place.

"This phase and the eventual demolition will cost over £12m and are due to be approved by the Department of Health by the end of February."

Mr Hopkins said the redevelopment retains the support of local GPs, the council and patient groups.

Carshalton and Wallington MP Tom Brake admitted St George's decision was a blow.

He said: "I'm very disappointed.

"A lot of effort has been put in by Epsom and St Helier, and St George's, in trying to develop a proposal for a merged trust.

"But obviously St George's had concerns about the amount of transitional funding that was going to be available to them to enable the merger to happen in a way they were going to be comfortable with.

"It could have worked but now, as a matter of urgency, they've got to go back to the drawing board."

A transaction board set up to look at the merger had spent two months examining how teaming up with St George's would work.

Jan Sawkins, the independent chairman of the board, said: "While we have always been aware that a bidder could withdraw during the process, at this stage in the transaction it is obviously very disappointing news.

"The transaction board has a meeting scheduled next week and we will use this to consider the options and agree a way forward."

The Government has demanded that all NHS hospitals become part of Foundation Trusts by 2014.