The Department of Health should develop detailed plans on how to cope when one of its flagship foundation trusts becomes insolvent, according to the head of the foundation trust regulator.

Bill Moyes, chairman of Monitor, said ministers also need to invest much more in helping hospitals cope with the new National Health Service market.

He told the FT that "there will be some that become genuinely insolvent, and we have to work out, even if we never use it, what happens then".