Brian Milstead announced in March that 300 jobs were to go

Brian Milstead is one of the longest serving chief executives in the NHS and has overseen the establishment of the trust as a teaching hospital.

But Cornwall's current overspend of nearly �16m is the most significant in the South West region.

In a statement, Mr Milstead said he accepted responsibility for the current financial situation of the trust.

'Time is right'

In March, the trust, which runs the Royal Cornwall Hospital in Truro, reported a deficit of �8.1m and announced that 300 jobs would go.

Earlier this month it was revealed the actual level of debt stood at �15.7m.

In a statement on Thursday, Mr Milstead said: "As chief executive, I have to accept responsibility for the current financial situation and feel that the time is right for a new appointment to guide the trust forward to Foundation Trust status.

"I wish the trust and its staff and colleagues in health, the county council and partner organisations every success for the future."

The trust's current overspend is nearly �16m

He also went on to thank the public for their support for a number of fundraising drives in recent years including the Mermaid breast care and Sunrise cancer centre appeals.

Critics said the government needs to be clear about why the trust is in its current predicament.

St Ives Liberal Democrat MP Andrew George said: "I think that ministers need to be able to demonstrate that the chief executive and other executives are responsible, and they are not being used as fall guys for this completely unacceptable situation."

The regional headquarters of the NHS, the South West Peninsula Strategic Health Authority, said that Mr Milstead took the decision himself and that he had not been asked to resign.