The chief health watchdog in England is expected to expose these hospitals, declaring them “weak”.

The Healthcare Commission’s annual assessment of the NHS, to be released tomorrow, comes as many hospitals and health trusts, struggling to curb spending, are cutting frontline services.

A group of 63 trusts are responsible for 70 per cent of the NHS’s deficit.

Ms Hewitt told The Times that trusts that were running up debts were also likely to be mismanaging parients and have worse waiting times, cleanliness and MRSA infections.

“I’m afraid that a lot of the trusts with the worst financial records are also weak on quality of care,” she said. “You can see why when you visit hospitals like that.

“They are not making the best use of their resources, not working through the processes of making sure everybody is paying attention to hygiene and cleanliness, and if they’re not doing that, they’re probably not going through the processes of making sure everything else is being done properly.”

Nearly a third of hospitals and a quarter of all 570 NHS organisations failed to balance their books in 2005-06, leaving the NHS with a net deficit of £547 million, the Health Department announced this week.

Ms Hewitt will ask failing trusts to propose and implement an action or improvement plan within a month, if measures are not in place. “We are going to be asking all of those trusts to sit down with their strategic health authority and set out very clearly what they can do and what more they intend to do,” she said.

However, the commission will paint a varied picture. “The report will show considerable variation in performance across the country,” she said. “Clearly, we will have some trusts that are excellent on quality, but also excellent on financial management, but we will also have trusts that fail on both.”

Five years ago the Government introduced hotel-style star ratings for hospitals to encourage them to improve quality of care. However, a new system uses a wider range of measures, including clinical and financial performance, to rate trusts as excellent, good, fair or weak.

The inclusion of financial management will damage the ratings of many hospitals.

The NHS deficit has more than doubled in the past 12 months, with the biggest problems concentrated in the South East and eastern England. In recent months, thousands of job cuts have been announced in order to make savings.

Ms Hewitt said that the previous system of assessment had not helped to tackle the problem.

“Star ratings muddled up the quality of care with the use of resources and financial management,” she said. “One of the problems we identified last year when the deficit came out was that the star ratings system was ignoring small deficits and not sending out the right message to trusts who overspent. When you’ve got a trust that is quite weak in its financial management, they are generally weak at other things as well.”

The latest figures show that 120 of 548 NHS organisations are now predicting deficits for the current financial year, with 90 per cent of the estimated gross deficit originating from 71 of the trusts.

The commission’s report will be published along with a website that will provide information about the performance of all NHS trusts in England, and offer comparisons. The commission is likely to support strongly early action on those trusts judged to be weak.

It has promised the assessment will be tougher than star ratings, with fewer trusts falling in to the top category. The score for the quality-of-services rating will be based on how well trusts meet the commission’s 24 core standards in areas such as safety and clinical effectiveness.

“In general I would expect that trusts that were doing well under the old system will do well under the new system,” Ms Hewitt said. “But this is a tougher assessment and it’s designed to be because what the NHS can do for patients is much greater that it used to be, and patient expectation is rising every year, so it’s right that the commission should be setting the bar higher.”

Times Recommends

• Catalogue of failings ‘leaves others at risk’
• Tourists told to stay away amid Venice floods
• Google generation has no need for rote learning