The North East Wales Trust runs Wrexham Maelor Hospital

Officials say the trust has faced "significant cost pressure".

The deficit is expected to reach �1.6m by the end of the current financial year.

A report, to be discussed by the trust board on Wednesday, blames changes to consultants' contracts, higher energy costs and an increase in surgery.

The document, written by the trust's director of finance, Wayne Harris, states that the deficit had reached �1.13m by 31 December 2005 and is expected to continue to grow.

Non-pay costs were much higher than expected and were running �1.23m over budget. These include the cost of drugs, bed hire charges and an increase in the price of fuel.

The trust is facing a soaring bill for agency staff nurses. The executive nurse is reported to have introduced a "robust protocol" to try to reduce the cost of hiring staff

The impact on the trust's budget of new contracts for consultants is also said to be an important factor.

A deficit management plan has been adopted by officials. Staff vacancies are being reviewed and there are "enhanced controls on ordering".

Talks are underway with local health boards to establish if any further funding can be released.

The North East Wales NHS Trust is not alone in facing an overspend.

In December, the board of the Conwy and Denbighshire trust, which runs Glan Clwyd hospital, were told that a budget deficit of �4.9m was forecast in 2005/2006.