Birmingham's four health trusts could merge in a major shake-up of the NHS, Health Secretary Patricia Hewitt said yesterday.
A consultation on the proposed changes will begin in two weeks, she said.
The announcement came as it emerged the NHS was forecasting a deficit of £620 million for 2005/06.
Ms Hewitt said she had taken the unusual measure of publishing unaudited accounts to put pressure on health trust managers to reduce spending.
She said: "I have made the decision to publish the data because I want to make it clear that inefficiency and poor financial management are not acceptable." Ministers are planning a major reform of primary care trusts, which are responsible for overseeing health services and managing GP surgeries, just three years after they were formed.
The 30 PCTs in the West Midlands will be reduced to about 15 larger bodies, through a series of mergers.
One of the options is to merge Birmingham's four PCTs into a single body.
But Ms Hewitt is also considering keeping three PCTs in the city.
This is the preferred option of Birmingham and the Black Country Strategic Health Authority.
At the same time, the Government is proposing a merger of the region's three Strategic Health Authorities, including Birmingham and the Black Country; Shropshire and Staffordshire, and West Midlands South, into a single body. The consultation will begin on December 14 and continue for 14 weeks.
MP John Hemming (Lib Dem Yardley) said: "We had a single health authority and they split it into four. Now they are considering merging it back into one. Whatever structure they choose, the best idea is to leave it alone and let people get on with their jobs." Conservative MP Caroline Spelman said larger health authorities would lead to less responsive services.
"I don't believe big is beautiful and these changes will not improve services for patients."
The Department of Health is also to send in officials to force health bodies with the biggest debts to balance their books.
Ms Hewitt said: "These teams will be experienced in resolving financial problems and managing NHS organisations.
"They will focus on ensuring the organisations deliver the efficiency and quality improvements needed to achieve both financial balance and better care for patients."
But efforts to reduce deficits in Midland health trusts so far have been highly controversial.
Birmingham and Black Country Strategic Health Authority has revealed it is considering cutting 1,200 jobs by freezing recruitment.
Worcestershire Acute Hospitals NHS Trust is considering downgrading facilities at the Alexandra Hospital in Redditch.
Job cuts are also planned at Coventry's Walsgrave Hospital and Shrewsbury and Telford Hospital NHS Trust.
Ms Hewitt said that this time last year, the NHS was forecasting a deficit of £499 million but this fell to £219 million by the end of the financial year.
She warned: "We intend to ensure - that the position at the end of this year will be significantly better."