The scale of the financial crisis facing health services across the Midlands has been exposed after the Department of Health wrote to 20 Midland trusts warning they had " significant" budget deficits.
Hospitals, ambulance trusts and primary care trusts, which run GP services, have all been targeted.
It follows a damming report which revealed three Midland hospital trusts had each plunged more than £5 million into debt.
Now Health Secretary Patricia Hewitt has written to every trust and PCT showing "a significant deficit", which is defined as a debt of one per cent or more of their total turnover.
Birmingham MP Liam Byrne (Lab Hodge Hill), a Health Minister, revealed 130 trusts had received warning letters, including 20 in the West Midlands. He made the statement in a House of Commons written answer.
West Midlands Ambulance Service, Good Hope Hospital and Sandwell and West Birmingham NHS Trust, which runs City Hospital in Birmingham, are among those to receive the letters.
It comes as reports suggest the NHS will be forced to sack thousands of staff to tackle a £750 million budget shortfall.
Birmingham and the Black Country Strategic Health Authority, which is in sound financial shape, is being encouraged by The Department of Health to offer loans. But West Midlands South SHA and Shropshire and Staffordshire SHA, which are in deficit, will have to make budget cuts.
A Department of Health spokesman said cash would not be transferred between authorities.
Instead, some would end the year with a budget surplus which could be set against the deficit in other authorities, so that the NHS broke even nationally.
Last month, a joint report by spending watchdogs the National Audit Office and the Audit Commission revealed that Good Hope Hospital in Sutton Coldfield had overspent its budget by £5 million.
The Royal Wolverhampton Hospitals NHS Trust, which runs New Cross Hospital in Wolverhampton, overspent by £7.6 million, and Worcestershire Acute Hospitals NHS Trust, which runs the Worcestershire Royal Hospital in Worcester and Alexandra Hospital in Redditch, overspent by £12.8 million.
Last night, MP Richard Taylor (Ind Wyre Forest), a former GP, said: "The situation is dire."
He said: "The Government sits on its laurels because it has put lots more money into the NHS, and some things such as cardiac or cancer care have certainly improved.
"But it has also introduced reforms which caused this tremendous deficit."