The reductions will affect all areas of the workforce

It is thought three quarters of the redundancies at the University Hospital of North Staffordshire in Stoke-on-Trent could be compulsory.

An estimated 370 of the posts will be nurses and midwives. Vacant posts may not be filled to help reduce staffing and 15 consultant posts could be cut.

The Department of Health said it was reassured services would not be cut.

Compulsory redundancies

A spokesman for the NHS trust said the hospital needed to reduce its workforce of 7,000 by the equivalent of 1,000 posts.

Staff have been told about 750 compulsory redundancies may be needed.

We expect all NHS organisations to live within their budget whilst providing patients with better services Department of Health Why are there NHS debts?

This is in addition to strict controls on recruitment to vacant posts and invitations for expressions of interest from staff over voluntary redundancies, early retirement and reduced working hours.

The move has fuelled fears similar redundancies could be made at a number of other trusts also struggling to balance their books.

The total shortfall for the NHS in England this year is expected to be more than double last year's at �620m.

This has been caused partly by more expensive drugs but mostly by a big increase in staff pay, the cost of which the government admits it underestimated.

'More jobs threatened'

Dr Beverly Malone, of the Royal College of Nursing, told BBC News: "We've seen a steady creep of these types of issues, from the freezing of posts to now we are actually talking about redundancies.

"This could happen at any of the hospitals and trusts that are having deficits and, as we know, there's a number of them that are in deficit."

The chief executive of the University Hospital of North Staffordshire, Anthony Sumara, said: "We hope once this most difficult part of the changes is completed the vast majority of staff who remain can begin to feel more secure and confident in the future.

"This is a very good hospital and I know it is only through the tremendous efforts of our staff that we have met our targets and made changes to our working practices that have so improved life for our patients, so I am deeply saddened we now find ourselves in this position."

The Department of Health said the hospital was being helped to control finances without adversely affecting patient care.

Turnaround teams

In a statement it said: "We are reassured that the trust has made it clear that they plan to improve efficiency without cutting patient services and that they are consulting on any possible redundancies.

"We continue to work with the most challenged organisations, sending turnaround teams in to help them get on top of their financial problems and bring overspending down.

"We expect all NHS organisations to live within their budget whilst providing patients with better services, and the majority are."

Last year the hospital's trust chairman resigned over financial errors.

Calum Paton and four non-executive directors stood down in December after admitting two sets of auditors did not pick up on an overspend of �18m.