Parliament's spending watchdog has expressed concern at the large deficits reported by a growing number of NHS organisations.

In a report published on Wednesday, the National Audit Office found that the deficits "may put at risk" the financial balance of the NHS.

The study, which looked at NHS accounts for 2002/03, found that the number of bodies with significant financial problems rose to 51 - up 20 from the previous year.

North Bristol NHS Trust was highlighted as an example of poor financial management, having run up a record deficit of £44.6 million.

A total of 10 NHS organisations reported deficits of more than £5 million and six trusts had cumulative deficits of over £10 million.

Across the NHS as a whole, an underspend of £96 million was reported against total spending on healthcare of £46.7 billion.

"Although, overall, the NHS successfully met its financial targets in 2002/03, I am concerned by the variation in financial performance and the large deficits incurred by some NHS bodies," said auditor general Sir John Bourn.

"Such deficits may put at risk the achievement of overall financial balance of the NHS if they are not matched by surpluses elsewhere in the NHS.

"The Department of Health has delegated detailed monitoring of NHS trusts and primary care trusts to strategic health authorities.  They must ensure that deficits of the scale of the £44.6 million incurred by North Bristol NHS Trust do not happen again."

'Extremely concerned'

The chairman of the Commons public accounts committee, Edward Leigh, said he was "extremely concerned" at the report's findings.

"The in-year deficits are more than matched by surpluses elsewhere and, for the present at least, the overall financial balance of the NHS has not been imperilled," he said.

"But that situation could change if determined action is not taken by the trusts in question to claw themselves out of the red."

"I fail to see how they can generate big enough surpluses in future years to wipe out those deficits without, in so doing, giving their patients reduced levels of healthcare," he added.

"The people living in the parts of the country covered by those NHS trusts will want an explanation."

But NHS chief executive Sir Nigel Crisp was satisfied with the figures.

"The NHS as a whole reported an underspend of £96 million within the context of an overall budget of over £50 billion, and this is the third successive year that the NHS has achieved overall financial balance," he said.

"This demonstrates sound and effective financial control."

"Over the years 2003/04 to 2007/08, NHS expenditure in England will increase on average by 7.3 per cent a year, over and above inflation," he added.

"Accordingly, the NHS is well placed to continue our programme of modernisation and improved service delivery."

But Liberal Democrat health spokesman Paul Burstow said the findings were "worrying".

"The fact that one in 12 NHS organisations had significant debts is worrying," he said.

"The pressure on hospital managers to meet central targets should not endanger their ability to balance their books.

"NHS trusts need the freedom to deliver improvements locally to match local needs."