Health Secretary Alan Milburn announced that construction of a �442m hospital in London will begin immediately.

The facility will replace four existing hospitals and is due to open by 2005.

The announcement comes 25 years after the original decision to replace University College Hospital, the Middlesex Hospital, the United Elizabeth Garrett Anderson Hospital and the Hospital for Women was made.

The proposed 16-storey building will be built through the government's private finance initiative with costs shared equally between the NHS and the private sector.

In return, the NHS will make an annual payment of �32m to the private company Health Management plc for a total of 30 years for use of the facility.

The hospital will have 664 beds and is expected to carry out nine per cent more operations and see 14% more outpatients than the existing facilities.

Impressive and modern

Mr Milburn said the hospital will provide modern care for patients.

"This will be an important impressive new hospital, providing the most modern care for Londoners."

The hospital, which will be called University College London Hospitals NHS Trust, will be based on Euston Road in the capital.

Trust chairman Sir Ronald Mason described the announcement as a dream come true.

"This is a dream come true for this part of London. We've been waiting for this for nearly 25 years.