The new official hospital watchdog has threatened to close scandal-hit Mid Staffordshire Hospital Trust unless it improves.
The Care Quality Commission granted a licence to the trust, which runs Stafford Hospital and Cannock Chase Hospital, with strict conditions attached.
And if the trust fails to meet them, it will face a warning, fines, prosecution or closure.
Under a new system of regulation set up by the Government, hospitals need to be registered with the Care Quality Commission in order to operate.
It follows an inquiry which found the trust had put patients at risk with appalling standards of care - and between 400 and 1,200 more people died than would have been expected in a three-year period from 2005 to 2008.
In February, an independent inquiry into Mid Staffordshire NHS Foundation Trust found it “routinely neglected” patients and displayed “systemic failings”.
It has now been ordered to provide evidence it is improving the way it deals with emergency patients by April 1.
The trust has also been told to show it has improved the way it monitors care in wards, makes sure staff have the right equipment and the training to use it, monitors the performance of staff and takes complaints from patients and relatives seriously.
It has also been told to ensure it employs enough nurses, after admitting nine out of ten positions were vacant.
The Care Quality Commission has also imposed conditions on Milton Keynes Hospital NHS Foundation Trust, following concerns about the quality of maternity care at the hospital. Other trusts need to register, but have not had conditions attached.
Andrea Gordon, the Commission’s regional director, said: “Few trusts have undergone the intense scrutiny that Mid Staffordshire has experienced, both from Commission and from other parts of the NHS system. The scale of change required was significant and was never going to happen overnight.
“We are seeing progress and evidence that patient care is improving. But we have continuing concerns about some aspects of care and these must be addressed.
“We need to ensure the trust delivers its action plans on time and that patients see real improvement in their care on the wards. For this reason, we have imposed a number of conditions that will legally require the trust to take action.
"We are about to begin a further review of services at Mid Staffordshire and if we find the improvements have not been delivered on time, the trust could face tougher enforcement action.”
