A government decision on the future of a 拢800m PFI hospital planned for Paddington, west London, is expected to be put back until well after the general election expected in May

The delay follows a decision last week by landowner Paddington Developments Corporation (PDCL) to walk away from a land deal with the team behind the Paddington Health Campus.

Whitehall sources claim this could delay a decision by the Department of Health on the project鈥檚 future until November. One source said: 鈥淚t鈥檚 not likely to be considered by the DoH until way past the election.鈥�

PDCL said last weekend that it was pulling out of a land-swap with PHC after nearly a year of negotiations. Project director Howard Wright told The Times: 鈥淩eluctantly we concluded we should withdraw.鈥�

Sources at both the PHC team and the Department of Health insist this has not stopped the scheme.

They claimed that last month鈥檚 offer of fresh land owned by Westminster council, which could slash 拢60m from the bill for the project, was still on the table.

A source at the DoH said that the scheme still had a future. He said: 鈥淚t鈥檚 not all off. PDCL has pulled out of the overall agreement but not necessarily from selling the land. As far as we are concerned it鈥檚 a further twist rather than the end.鈥�

In a statement, the DoH said:

鈥淭he corporation has confirmed that it will resume negotiations with the project team should the scheme be given the green light in the short term.鈥�

The statement added that it had yet to receive full details of the new plan.

It said: 鈥淒ecisions will be made on the scheme only once these documents have been fully analysed and discussed with trust.

鈥淚t is too soon to make any judgment about the outcome of these discussions.鈥�

Peter Rogers, chief executive of Westminster council, said the council was still committed to the project.