The decision follows public consultation

Musgrove Park, run by the Taunton and Somerset NHS Trust, said there were "too many unknown factors", especially in the proposed financial regime.

The trust says it was invited to apply because of its three star rating, and will reassess its decision in "a year or two."

Foundation trust hospitals have more control over their budgets and services though they remain in the NHS.

For example, they are able to keep the proceeds of sales of land and premises and can borrow extra money from financial markets.

Brian Tanner, chairman of the trust, said; "After analysis of all the factors, particularly the financial requirements of the new system, we have decided that the trust is best placed by not becoming a foundation hospital at this time.

"To be blunt, while this is an exciting policy, there were just too many unknown factors in the new financial regime and we did not consider that it would be a responsible decision to continue with our application."

The decision comes after consultation involving 4,000 residents.