Papworth Hospital’s move to Cambridge has stalled after a review of the plan was ordered by the Government.

Work on building a new 310-bed home on the biomedical campus next to Addenbrooke’s Hospital was due to start this autumn. After years of talks, the proposal was so far forward that Skanska had been chosen to lead the consortium to design, build and maintain it.

An artist’s impression of how the new hospital would look was released in December and it was hoped construction would be finished by 2017.

The Department of Health was said to have cleared the business case for the move and it had been passed to The Treasury for approval.

But Papworth Hospital chief executive Stephen Bridge has revealed the Government wrote just before Christmas to say it wanted to look at the plans again.

One suggestion is that Papworth could move some or all of its services to Peterborough, where the hospital is run by the Peterborough and Stamford NHS Foundation, and has a deficit worth about £38million.

It is the subject of a five-year rescue plan, which includes inviting bids from other health providers to use under-used space at the city hospital.

But Mr Bridge said moving Papworth there would be “wrong” and would make a relatively small dent in the budget deficit.

Commenting on the Government’s intervention in Papworth’s Cambridge move, a spokesman for the Department of Health said it wanted assurances around the affordability of the scheme and whether it represented value for money.

Mr Bridge, who has worked at the specialist heart and lung hospital for 25 years, said he hoped the Government would have all the information it needed within a month.