An NHS hospital trust has been formally warned it could be declared bust - in the first case of its kind.

South London Healthcare, a merger of three hospital trusts, had a £69m debt at the start of the financial year.

The health secretary has told the trust an administrator could be brought in within weeks. The trust could be dissolved and some services closed.

A spokesman for the trust reassured patients that services would be run "as normal" until a decision was made.

The trust amalgamated the Princess Royal University Hospital in Orpington, Queen Mary's Hospital in Sidcup, and the Queen Elizabeth Hospital in Woolwich in 2009.

When the three hospitals became one organisation they inherited a large debt - mainly from the private finance initiative (PFI) that had been used for the buildings at Orpington and Woolwich.

In recent years, the deficit has got worse - it reached 2012 with £69m of debt on a turnover of just over £424m.

The effect will be felt across the health service - and while that may be welcomed by health economists, it will undoubtedly cause dismay to some patients.

What happens if the trust tells the companies it owes money to through PFI to shove the debt up their arses? And don't the government have access to billions at the drop of a hat for bailouts?

I don't know. I'm not sure there will be any ways to get out of the contracts, or mitigate them.

The BBC puts the story in writing.

The health service will need an extra £20bn a year by the end of the decade to meet patient demand and implement the Dilnot report into social care without cutting other essential services - a level of funding that means ministers should contemplate charging for the NHS and tax rises, a leading thinktank will say on Wednesday.

The Institute for Fiscal Studies (IFS) says in a report that England's NHS budget squeeze - with savings of £20bn up to 2015 - is already the "tightest four-year period for the last 50 years". NHS spending will be essentially flat in real terms - at about £110bn a year - until 2015.

However, with the NHS accounting for 23% of government spending, plus an ageing population, rising patient expectations and expensive new drugs on the horizon, the thinktank warns that in the last half of the decade a mixture of charging, tax rises and perhaps even greater borrowing will be needed.