Controversial plans to build a hospital in Oxford with private money came under fire last night.

Workers gathered at Oxford Town Hall to demonstrate their opposition to a deal involving the new Nuffield Orthopaedic Centre in Headington.

The 134-bed development will be funded through a private finance initiative, through which new buildings are paid for by the private sector and the NHS then pays 'rent' for 30 years.

Support workers, including maintenance, catering and cleaning staff working for the hospital, will soon become employees of private financiers, Albion, even though the hospital will not be completed before 2005.

Union leaders claim the move means staff will lose NHS pensions and benefits, and the NHS will have no control over their staff for three decades. The Oxfordshire Against Privatisation rally was also held to protest against similiar deals which are due to be introduced at Oxford's John Radcliffe Hospital and Churchill Hospitals.

Veteran trade unionist Rodney Bickerstaffe, president of the National Pensioners' Convention, told the rally the move towards PFI was the tip of the iceberg.

He said: "We say 'hold on!' Has no-one ever heard of Maxwell, or Enron, or Equitable Life?

"The Prime Minister says pensions are about security, but the only way to get security is to have a decent firm and secure national pension.

"We are a rich nation, with £18.7bn in the National Insurance fund. We need to make sure they are going to make this money available to the NHS. "The PFI scheme is 'short-termism' of the first order. Generations will pay through the nose for anything between 40 and 65 years.

"We're against it in principle and against in practice."

Peter Fisher, president of the NHS Consultants' Association, said: "People need to realise that it's going to take years to make a difference and we musn't make judgements too soon. We have to make sure this money is not wasted.

"There's a great danger that people don't know how much PFI is planned. It's very clear there is much more PFI planned than people think, with public health providers being brought in from abroad.

"More money could be frittered away on that, and I think it's driven more by short-term political consideration.

"Even Mrs Thatcher wouldn't have accepted this!"