PLANS to transfer the running of NHS services in Gloucestershire to a social enterprise have been scrapped following a legal challenge by a 76-year-old campaigner.

Retired railway clerk Michael Lloyd argued that primary care trust NHS Gloucestershire acted unlawfully in planning to hand management of more than 3,000 staff and nine community hospitals - including Stroud General - to a new body.

But following an out of court settlement reached on Thursday halfway through a hearing at the high court in London, NHS Gloucestershire agreed to start again to find 'the best option for providing community services'.

In a joint statement, NHS Gloucestershire and Mr Lloyd said: "We recognise the need for efficient use of public funds and believe that an end to legal proceedings is in everyone's interest - particularly patients.

"The PCT also recognises it is important to maintain the confidence of patients, public and staff in decisions made concerning NHS services in our county."

The statement continued to say that without accepting there was any merit in Mr Lloyd’s legal complaints, the PCT agreed not to enter into a contract with social enterprise Gloucestershire Care Services (GCS).

However, a future deal with a social enterprise was not ruled out but the PCT assured the public that they would be consulted on the best method of providing NHS services.

The campaign began in July when NHS Gloucestershire announced it was considering the reorganisation of health services across the county including transferring the running of Stroud General to GCS.

In August protesters lined up outside the hospital to challenge the transfer on the day the decision was due.

A public meeting was called in September but NHS officials failed to allay fears and later that month Mr Lloyd launched legal action by threatening a judicial review.

NHS Gloucestershire then temporarily halted its plans in October before continuing with the proposed transfer resulting in Mr Lloyd renewing his legal action - backed by campaign group Stroud Against The Cuts.

Chris Moore, SATC co-ordinator, said: "We supported Michael Lloyd in his case and we have said all along that the transfer of NHS staff and services to a social enterprise or community interest company was a massive step towards privatisation.

"We are pleased this process has been stopped but we need to continue the campaign to defend services.

"This has national implications."

SATC is holding a public meeting to discuss the next step following the court case at Stroud Sub Rooms on Thursday, March 15 from 7pm to 10pm.