Papworth Hospital’s £165million move to Cambridge has today (Thursday) been confirmed by the Government - just weeks after the process had apparently stalled.

The Chancellor, George Osborne, and Chief Secretary to the Treasury, Danny Alexander, annouced the deal for a new 310-bed specialist heart and lung hospital next to Addenbrooke's could now go ahead.

Mr Osborne said he had been a strong supporter of the move. He added: "As I said on a visit to Cambridge last week, there is great value in these two leading hospitals working more closely together and continuing to provide first class medical care.

"By backing Papworth's relocation to a medical research cluster we're supporting the world leading science which is vitally important to Britain's economic future.

"It is only because we have been working through our long term economic plan and got a grip on day to day spending that we can protect our NHS and make great investments like this."

Mr Alexander said: "This ambitious package will ensure that patients across the East of England continue to benefit from access to world-class specialist treatment, will secure Papworth hospital's future location, and help further develop its world leading capabilities.

"Bringing Papworth and Addenbrooke's more closely together will also create a hub of leading-edge research and pharmaceutical development and also firmly underlines our commitment to the long term plan for science."

The move has been mooted for years and, after much hard work, a contrator, Skanska, had been selected to lead a consortium to design, build and maintain the new hospital.

But in February, the proposdal was put on hold after a review of the plan was ordered by the Government.

Papworth Hospital chief executive Stephen Bridge said the Treasury had wanted more evidence about why some or even all of Papworth's services could not transfer to Peterborough City Hospital.