The first hospitals to be granted foundation status were revealed on Wednesday.

NHS Trusts awarded the maximum three stars in their assessments were invited to apply for foundation status.

Of the 12 NHS trusts to do so, 10 were approved, while two - North Tees and Hartlepool and Rotherham General Hospitals - requested more time to work on their applications.

"Becoming a foundation trust offers managers, staff, patients and the local population the opportunity to decide for themselves how their trust should meet local needs," said Bill Moyes, chairman of the independent regulator.

"Foundation trusts will still be expected to deliver against the key national targets - reducing waiting times and constantly improving clinical outcomes.

"But they will now have the freedom, working with their members and the local health community, to identify local priorities and to decide how best to meet them.

"It's a great opportunity.  I am confident that the trusts we have licensed today will use these freedoms to deliver more and better care to the patients they serve."

However, Labour backbenchers - including former health secretary Frank Dobson and chairman of the health select committee David Hinchliffe - and union leaders continue to warn against the move fearing a "two tier" NHS.

"Foundation hospitals will have major financial advantages over their neighbours and will also act as magnets poaching essential staff from nearby hospitals," said Karen Jennings, head of health at the Unison trade union.

"Staff in hospitals struggling to get even one star are bound to be attracted to these hospitals, who will be free to offer additional incentives as well as generating better staff morale by their success.

"Unison believes that the review process must be transparent, open and wide-ranging.

"It seems obvious that the terms of the review should include an assessment on the impact of other local hospitals and the wider local health economy and we will be working to ensure that this is the case."