West Middlesex is one of the most vulnerable hospital trusts in the country to loss of services and cutbacks, a new national survey by the Liberal Democrats claims.

Despite having new buildings and long term modernisation plans, there is concern that the hospital, which has a history of financial difficulties, will be vulnerable when a new payment system is introduced in which it will face competition from private treatment centres.

Twickenham MP Vincent Cable said this was because the hospital had low efficiency, which meant it could suffer under the new payment by results system.

The hospital said it acknowledged that all trusts were under pressure in the new environment, but highlighted that the report had referred to both its improved environment and financial situation.

Dr Cable said: "As a supporter of the hospital and its staff, I don't want to encourage alarmist speculation. But there clearly is a problem: if the Government really is serious about making market forces and competition work in the hospital sector, the weakest and costliest hospitals will go to the wall.

"Although it is inconceivable that the Government could allow a newly built hospital like the West Middlesex to close, it is not too difficult to see how the next few years could see some very painful cuts and belt tightening."

A spokesperson for West Mid said: "As the report indicates, the trust has seen great improvement in recent years, both in terms of facilities and the levels of patient care provided. Reference is made to the fact that West Middlesex University Hospital has undergone significant building regeneration, which has provided it with modern buildings for its A&E services, critical care, operating theatres and outpatient units. There is also a long term plan in place to completely renovate the site and to modernise the available facilities and buildings, some of which date back one hundred years."

The West Middlesex University Hospital NHS Trust set a budget for the financial year 2005-06 of £106million.

Last financial year, it overspent by £1.4million.