Addenbrooke's became a foundation trust in July

Twelve months ago, staff at Peterborough Hospital were celebrating their three stars in the annual NHS ratings.

The stars ranked the trust among the best in England and paved the way for it to apply for foundation status.

Twelve months on and the trust has its foundation status and much more freedom from government control.

But it has also lost one of its all-important stars. What went wrong?

The Healthcare Commission assesses every hospital, ambulance and primary care trust in England against key government targets, such as waiting lists and cleanliness.

Marked down

This year, it marked Peterborough and two other foundation trusts down partly because of concerns over the way it manages its finances.

"We were unable to balance the finances," says Chris Banks, the trusts chief executive. "We reported a deficit of �970,000 for last year."

We are hugely disappointed Stephen Bridge, Papworth Hospital

The shortfall represented less than 1% of the trust's annual income but it was enough to cost it a star.

It was a similar story at Addenbrooke's Hospital and Papworth Hospital in Cambridgeshire.

But Addenbrooke's was also pulled up on its "clinical focus" - how it monitors the quality of care it gives to patients and how it treats some patients.

"We have areas that need attention and this will be given," says Malcolm Stamp, its chief executive.

"This drop in star rating in no way compromises the standard of care given to our patients.

"We remain top of the league in this respect and will continue to seek improvement in all that we do."

'Hugely disappointed'

However, Stephen Bridge, chief executive of Papworth Hospital, is critical of the decision to downgrade his trust.

"We are hugely disappointed," he says. "We feel that the reason for losing a star is based on technicalities which bear no relation to the quality of the care we offer to our patients."

We have areas that need attention Malcolm Stamp, Addenbrooke's Hospital

The Moorfields Eye Hospital in London lost its star partly because of concerns over how it manages its staff, in particular junior doctors.

"At the time of the survey, we were having difficulty in one small treatment area," says Ian Balmer, the trust's chief executive.

"We have rectified this by changing shift patterns."

But Mr Balmer also blames an administrative error on the loss of the coveted star.

"We would have retained our third star, had we not inadvertently submitted inaccurate data over the level of consultant appraisals.

"We informed the Healthcare Commission as soon as we realised our error, but, for quite understandable reasons, they cannot adjust figures once submitted."

However, the decision to strip these four flagship hospitals of their three star ratings has sparked controversy.

John Appleby, chief economist at the health think tank The King's Fund, says it raises questions over how foundation trusts are selected.

"The Healthcare Commission's report raises some serious questions concerning the initial basis for selecting trusts for foundation status," he says.

"Three out of the four foundation trusts who lost a star this year did so due to financial planning problems.

"Yet they had been thoroughly assessed by the independent regulator as being financially sound.

"Either the star rating system is at fault or the independent regulator has reached a wrong assessment."

The Healthcare Commission for its part stands by its ratings.