The Royal Free will lose 100 beds

The north London hospital, which has a �16m overspend, said it will try to keep redundancies to a minimum but could not rule them out.

It said it will treat patients more efficiently so will need fewer beds.

Meanwhile, Queen Mary's Hospital in Sidcup, Kent, is to launch a 90-day consultation over plans to axe 190 jobs including 103 nurse and midwife posts.

More than 2,000 job cuts have now been announced at hospitals across the UK in the past week.

At the Royal Free, the �25m savings is made up of the �16m overspend, meeting a 2.5% government efficiency target and �10m in increased salaries, costs of drugs and equipment.

We must achieve financial balance if we are to control our own future as the government has made it very clear that they will not bail out organisations which fail to do so Trust chief executive Andrew Way

The overspend must be paid back by the end of the next financial year because all trusts must repay accumulated deficits within five years.

The year 2006/07 is the Royal Free's fifth and final year of this cycle.

The trust stressed patient care and safety remain paramount and it said it will ensure that it maintains staffing levels to a safe level.

It added most of the reduction will be achieved through reduced temporary staff usage and not filling vacant posts.

Andrew Way, chief executive of the trust, said: "These measures are not exceptional and are designed to bring the Royal Free into line with other organisations.

Sacking nurses never looks good for the government. Geoff Martin of the pressure group London Health Emergency

"We must achieve financial balance if we are to control our own future as the government has made it very clear that they will not bail out organisations which fail to do so."

But Geoff Martin, of pressure group London Health Emergency, said: "The Royal Free have tried to smuggle this news out on budget day but it certainly helps explain why Gordon Brown body-swerved the NHS question in his speech.

"Sacking nurses never looks good for the government.

"This hospital has already closed 100 beds and these staff cuts will have a devastating impact and make a mockery of emergency planning in London.

"The total cash crisis in the NHS in London alone is pushing �700 million and we are braced for much worse news to come."

The trust expects to end 2005/06 with a deficit of �5.2m.

At Queen Mary's, job cuts are being considered as one of a number of measures in an attempt to reduce a predicted �13m deficit.

A hospital spokesman said: "Losing staff is, of course, the last way in which we would choose to make savings and we hope to further minimise loss through redeployment and inviting staff to take advantage of voluntary redundancy or early retirement."