Cash-strapped health trusts in the West Midlands are to have their Government fund-i ng cut by more than £50 million next year.

The budget reductions will add to the precarious financial position many trusts are already in, and could lead to further cuts in services at hospitals across the region.

The financial crisis facing the NHS was illustrated this week when Health Secretary Patricia Hewitt admitted she expected the service would end the financial year more than £200 million in deficit.

Sir Nigel Crisp, the NHS chief executive, announced he was retiring early, sparking speculation he had been sacked.

Hospitals across the West M idlands have already announced a series of cuts, including Good Hope Hospital in Sutton Coldfield, which is to close two wards and two operating theatres.

The latest financial blow is a result of the Government phasing out a scheme called the purchaser parity adjustment earlier than expected.

This gave extra funding to health trusts in regions where costs were higher than average.

The issue was discussed at Birmingham City Council's cabinet after health trusts in the city revealed they would lose £100 million over three years. The Birmingham Post has now obtained figures showing the effect on trusts across the country.

In just 12 months, the financial year 2006/07, trusts in the West Midlands will lose £56.43 million.

Across England as a whole, hospitals will lose £320.23 million.

MP John Hemming (Lib Dem Yardley) said the NHS had been hit by "a financial

triple whammy" caused by the phasing out of the purchaser parity adjustment, changes to the fees trusts were paid for providing treatment, and a Whitehall clampdown on budget deficits.

He said: "The result will be ward closures, large scale redundancies and will be a significant effect on the patients and health care."

Ms Hewitt has already sent Whitehall officials to take control of finances at the Shrewsbury and Telford Hospital NHS Trust, which runs the Royal Shrewsbury Hospital and Princess Royal Hospital in Telford, and is heading for a £10 million deficit this year.

Officials were also sent to the University Hospital of North Staffordshire, in Stoke, w hich has a projected £18 million deficit, and the George Eliot Hospital in Nuneaton, Warwickshire, which is heading for a £5 million deficit. Attempts to control costs have led to cutbacks in health trusts across England.

In Greater Manchester, hospital chiefs announced this week they had cancelled 24-hour care because of the cash crisis.

Trafford NHS Trust said it was closing the two in-patient wards at Altrincham General Hospital after "safety" fears because of staff shortages.

At the other end of England, it emerged that one cashstrapped health trust was preparing to axe 300 of its 5,000 staff. The Royal Cornwall Hospitals Trust, which is facing an £8.1 million short-fall, blamed rising pay deals and the cost of drugs.

It is responsible for Cornwall's main acute service hospital, the Royal Cornwall Hospital, Treliske, in Truro, and two acute hospitals in Hayle and Penzance.