Demands for the resignation of Sutton and Merton’s health boss have been renewed as the spiraling debt of the area’s NHS trust is revealed.

NHS Sutton and Merton lost more than £10m in the last financial year throwing the proposed redevelopment of Wimbledon’s Nelson Hospital and Mitcham’s Wilson Hospital in doubt.

Wimbledon’s MP Stephen Hammond is calling for the trust’s chief executive, Bill Gillespie, to go and a fair consultation on the projects to take place.

Officials claimed the trust’s in-year deficit for 2009 to 2010 stood at £2.3m, but it has since emerged NHS London provided a £4m bailout while Wandsworth and Croydon's NHS trusts loaned £3.9m after running at a surplus.

Some £57m had been earmarked for construction of four new cutting-edge health care centres – including two in Merton – but the plans were called in for review amid drastic belt-tightening measures over the next three years.

Savings of £58m are proposed by May 2012, with £33m coming in the next financial year.

Mr Hammond said: “This whole situation has been brought about by the financial incompetence of those running the trust.

He said: “The future of the Nelson Hospital is at risk and we can have no faith in a review as long as the chief executive remains in his position.

“As the [Wimbledon] Guardian’s investigation shows, the trust ran up huge debts last year that could have an enormous impact on the provision of heatlhcare in Wimbledon.”

Mr Gillespie refuted claims there had been financial mismanagement and hit back by claiming Sutton and Merton suffered from an unfair NHS pricing system for urgent hospital care and the trust did not have the cash reserves to soak up an overspend.

He said: “Last year, all Primary Care Trust’s (PCT) in south-west London spent more than they planned on acute hospitals.

“Other PCTs had greater financial flexibility as they had more reserves to cover this.

“We had less flexibility as a result of significant commitments elsewhere – such as funding the complex programme to move people with learning disabilities into new homes.

“Also, our level of overspend on acute hospitals was high, despite a reduction in overall A&E attendances and referrals by GPs for hospital care.”

“This is why we are taking firm action to manage our finances by delivering a £28m better value programme.

“This involves working closely with GPs and local people to manage the demand and performance of local hospitals.”