North Staffordshire Hospital has welcomed the news

A new hospital is to be built on the site of the current City General in Stoke-on-Trent, Staffs, costing �272m.

And a further �140m has been earmarked by the government to complete the development of the Manor Hospital site in Walsall, West Midlands.

They are being partly funded by private firms as part of a national scheme which has been criticised by unions.

Health minister Andy Burnham announced the plans on Friday, which will also see four other new hospitals built around England.

Each scheme has been rigorously checked to make sure that it offers value for money Andy Burnham, health minister

They will be built under the Private Finance Initiative (PFI), whereby hospitals are built by private companies, with NHS trusts repaying them over a period of about 25 or 30 years.

The news was warmly welcomed by Antony Sumara, chief executive of the University Hospital of North Staffordshire, which runs the City General site.

"This announcement ends months of uncertainty following a treasury review of all major PFI projects.

"The government has now looked carefully at our own scheme and given us the go ahead to complete our plans."

'Financial burdens'

However, Unison, which represents medical staff, criticised the use of PFI money to build new hospitals saying the funding option had been discredited.

"Of course we welcome news that patients will benefit from bright, new hospital surroundings, but using PFI to finance these schemes is a waste of taxpayers' money.

"PFI schemes are expensive, inflexible and are adding to the current financial burdens of many hospital trusts."

But Mr Burnham said he was confident the schemes would be financially sound.

"Each scheme has been rigorously checked to make sure that it offers value for money and delivers services that are needed by local patients."

"This is great news for the hundreds of thousands of patients who will benefit from the modern, bright new buildings.

"The new facilities will not only be the best in terms of design and quality, but they will be affordable well into the future."