Cash-strapped Mayday Hospital is reeling from the news that its chief executive has quit her £115,000 a year post.

In a letter sent to staff yesterday (Tuesday) Vannessa Wood who led the trust for three years explained she was proud of her work, but recognised that the last year had been "particularly tough".

"I don't underestimate the difficulties that face the trust in this coming year but I know that, once the turnaround plan is implemented, you will see a new rigour and stability return to the trust," she said.

A Mayday spokesman said Ms Wood's decision had come as a surprise. The spokesman added: "As you know, the trust has a significant financial problem and Vannessa has led us to the point where we are ready to put in place the turnaround plan that will help us get back into balance.

"I think she felt that someone else would be better able to lead on the implementation of that plan."

Mayday is bidding for foundation status that would give it more financial control.

In order to gain foundation status hospitals must meet a strict set of criteria which includes a balance budget.

But the hospital said the resignation was nothing to do with the foundation bid.

"She has done some excellent work in getting us this far and we will continue to work up our application with the intention of submitting it when our board feels we are fully ready."

Ms Wood's announcement follows a turbulent few weeks for the London Road hospital, which is planning job cuts and ward closures.

In a statutory annual report from Mayday Hospital's patient and public involvement, the patient group's chairman Peter Howard criticised the hospital for its levels of cleanliness.

The report was compiled after representatives made unannounced visits to Mayday. Concerns raised included MRSA.

In April the hospital announced that 22 jobs including four nursing posts could be scrapped as part of an ongoing financial review to save money and to claw back a £6.8 million overspend.

Mayday bosses said they hoped to redeploy staff into job vacancies currently unfilled at the hospital but said that they could not rule out the possibility of staff redundancies.

At the time Ms Wood said in a letter to staff that she understood that they may be fearful or angry "having been in a similar position myself in the past".

Last month also saw Fairfield Two ward close while Purley One ward was re-designated from a ward dedicated to caring for the elderly to a general medical ward.

However the hospital have insisted that the re-designation of Purley One Ward was to increase efficiency and the move would not compromise patient care.

"There are no cuts to services," the Mayday spokesman, added, "We can treat the same number of people with less beds.

"Elderly people with their more complex issues are being treated in the four dedicated wards and four wards is enough."

Again the hospital denied the move had anything to do with its foundation bid.

Ms Wood is now on leave until the end of her contract. Her deputy Nikki Luffingham will fill her shoes until plans to appoint a successor are finalised.