Stuart Grey: Experienced

"We're not looking to reduce the number of hospitals," said Mr Grey.

"I think what we have to look at is the way in which hospitals work more collaboratively together.

"There's a very good network of community hospitals and community-based services and to develop those is important."

Assembly Health Secretary Jane Hutt said she was happy with Mr Grey's approach to the authority's problems.

"Stuart Grey has had a great deal of experience and is approaching things in the right way," she said.

Peter Thomas, the clinical director of Carmarthenshire NHS Trust - which is run by Dyfed Powys Health Authority - said he thinks Mr Grey's appointment would be welcomed by staff.

"I think that it will greatly help the morale of the medical staff to know the new chief executive wants to work with doctors and with nurses to develop a sustainable strategy that puts patients first," he said.

Critical report

The authority is due to set spending targets early next month.

In March, the authority's members were told that it was heading for a deficit of almost �50m over three years.

A report by the district auditor - which covered the 1998-9 financial year - described the authority's financial position as fragile and said its plans to tackle the problems failed to resolve some fundamental issues.

The report was critical that no solutions for saving money had been found.