Oxfordshire's major hospital trust will be allowed to sort out its financial problems without Government interference -- despite predicting a deficit of £24m in the current financial year.

Independent accountants KPMG have decided that managers at the Oxford Radcliffe Hospitals NHS Trust, which runs Oxford's John Radcliffe Hospital, Churchill Hospital, and Radcliffe Infirmary, and The Horton, in Banbury, are capable of getting the situation under control on their own.

But they will be given external support from experts to help them with the problem.

KPMG's verdict has led Health Secretary Patricia Hewitt to exonerate the Oxfordshire NHS managers she originally blamed for the increased cash crisis at the end of last year, when Oxfordshire's NHS trusts announced a combined £35m deficit.

She said: "KPMG were absolutely clear that even the best management would need extra support to turn the situation around in these cases. This doesn't reflect on the quality of management. Even the best management needs extra support."

But yesterday's announcement came a day before ORH managers announced that they expected a £24m deficit by the end of the financial year in March, and could see no way to reduce it. Today, ORH finance director Chris Hurst was due to tell board members about the shortfall.

In a report, he said: "Whilst the trust and executive boards have remained committed to do everything possible to mitigate fully the pressures by March, this is now an increasingly high- risk ambition.

"I reported last month that there is very limited scope for identifying further savings or for reducing expenditure in the remaining three months of this financial year.

"This assessment has been independently corroborated by the recent review undertaken by KPMG."

KPMG was sent in to investigate the finances of 63 NHS trusts at the end of last year, following accusations from health ministers that spiralling debts were due to bad financial management on the ground. But the ORH has not been named as one of 18 around the UK which need "urgent intervention", co-ordinated from Whitehall, to bring down their debts.

Instead, it is among 23 trusts which will get expert advice to support a financial turnaround.

Ms Hewitt said yesterday that all trusts with deficits must concentrate first on balancing the books month-by-month.