Ashford and St Peter’s Hospital has pledged to continue its bid to merge with Epsom Hospital despite St George’s NHS Healthcare Trust pulling out of its planned merger with St Helier and Sutton Hospitals.

St George's announced yesterday that it would not be continuing with its bid to merge with Sutton and St Helier blaming ‘financial challenges’ and uncertainty over how NHS services will be provided across South West London following the Better Services Better Value review .

Jan Sawkins, chair of the Transaction Board set up to help St Helier, Sutton and Epsom Hospitals achieve foundation trust status, 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. This may include re-opening tenders for St Helier and Sutton hospitals."

But as St Helier and Sutton face fresh uncertainty, the chief executive of Ashford and St Peter’s Hospital has assured Epsom Hospital that its bid will continue.

Chief executive of Ashford and St Peter’s NHS Trust, Andrew Liles, said: "The decision made by St George's Healthcare NHS Trust not to pursue their bid for St Helier and Sutton hospitals has not changed our position regarding Epsom and we will continue to progress our plans to acquire Epsom hospital (through merger) in line with the process set out by the Transaction Board.

"Of course this is still subject to approval by the Transaction Board, Epsom and St Helier, the local health authorities and others and by our own board, who will need to be assured that any final decision is in the best interests of both the Epsom and Ashford and St Peter's catchment populations.

"As a Foundation Trust already we feel we are in a strong position strategically to pursue these plans and we know they have already passed through the first stage of the process successfully, meeting the criteria set by local people, stakeholders and staff.

"These include new and innovative partnerships - with The Royal Marsden NHS Foundation Trust, Central Surrey Health and Surrey and Sussex Healthcare NHS Trust - to create an integrated healthcare campus at Epsom Hospital, bringing additional services and added benefits to local patients and staff.

"Our plans are also made more straightforward by the fact that Epsom hospital is not part of the Better Services Better Value review in South West London."

Mrs Sawkins added: "It is the current belief that, subject to Ashford and St Peter’s Hospitals NHS Foundation Trust being confirmed as the preferred partner for Epsom Hospital, the de-merger could continue whilst we make alternative arrangements for St Helier and Sutton.

"Whilst this would, of course, need further investigation and approval by the Transaction Board, the trust board and others, it is felt that this would be in the best interest of Epsom Hospital, its patients, staff and local people.

"However, I would emphasise that the priority remains to secure the future of Epsom, St Helier and Sutton Hospitals."