The Department of Health has insisted that management of failing hospitals by the private sector has become a policy of last resort.

It would only be in "extreme cases of under-performance" that management of the hospitals would be transferred to a private company or another NHS trust, officials confirmed yesterday.

The comments came as a survey by the Health Service Journal showed that none of the 11 trusts given a zero star rating last July were to be franchised out.

Of those threatened with such a move, only one had seen management change hands.