The borough’s health trust squandered more than £4.5m on consultancy fees as its financial woes deepened, the Government's Health Secretary has claimed in a stinging attack on his own department's spending.

Andrew Lansley released the figures for the last financial year as part of a national picture showing consultancy cost top expenditure on skin and lung cancer services combined.

NHS Sutton and Merton's bill was sixth highest of more than 130 health trusts in England, during a 12 month period where it lost more than £10m and had to be bailed out by neighbouring health authorities - Wandsworth and Croydon - in addition to NHS London.

A severe belt-tightening programme has been introduced to plug the soaring deficit, throwing planned redevelopment of Wimbledon's Nelson Hospital and Mitcham's Wilson Hospital into doubt, and sparking demands for the trust's chief executive Bill Gillespie to resign.

The trust has vowed to reign in its expenditure on consultants as part of the cost-cutting drive but disputed the figures released by the secretary of state.

A spokesman said: “Our accounts show that last year, NHS Sutton and Merton spent £2,673,239 on management consultancy last year, from a total budget of £606.5m.”

But according to Mr Lansley, Sutton and Merton's bill was the equivalent of hiring 140 additional nurses in the area.

He said: “I am staggered by the scale of the expenditure on management consultants in the NHS. Even at a time when it became clear that the nation’s borrowing was out of control, Labour allowed wasteful spending to blossom.

“I have asked PCTs and SHA’s to reduce their management costs by 46 per cent over the next four years. This will root out unnecessary bureaucracy and any expensive duplication of functions.

“Every penny saved will be reinvested in improving patient care, meeting demand and driving up quality.”