The new centre will be built at the QMC site and run by a private firm

NHS bodies and the Department of Health have signed a contract worth �203m over five years with Nations Healthcare to build, set up and run the facility.

It will be the largest single-site project in the government's independent sector treatment centre programme.

The site will offer NHS operations and be developed on the Queen's Medical Centre (QMC) site - one of the UK's largest teaching hospitals.

Capacity needed

It will provide NHS diagnostic tests, outpatient assessments and day treatments. Building work will start in the autumn and open by the end of 2007.

By 2010, about 160,000 outpatients should be seen with 24,000 booked treatments every year.

The idea is to provide extra staff and more operations to help achieve an 18-week waiting target by 2008.

Health Minister Lord Warner said: "The NHS is growing quickly, but we need more capacity to make sure patients wait no longer than necessary for their operations.

"That is why, on top of the treatment centres run by the NHS, we are also working with the independent sector to provide even more operations."