The government had been told that the project was not sustainable and despite this the private finance deal meant to make new premises was taken up by a hospital now losing £44m a year.

It attracted everyone’s concern that there was not enough money with Peterborough Hospital to make new buildings and this was even spotted at by the media, a report, commissioned by the hospital regulator, Monitor said.

The per year cost is about £22m a year to service for the project and the go-ahead was given by both the Treasury and the Department of Health despite a warning given to them.

Commenting on the report, a Department of Health source said, “This was a disastrous Labour PFI blunder. Labour was warned repeatedly by their own regulator that this PFI deal could bankrupt Peterborough Hospital but they pressed on regardless.”

On the other hand, a spokesman for Burnham said he would not comment until he had seen the full published report.

The expensive schemes that had created the debt was then tried to be paid by a £1.5bn bailout fund that the government established.