THE Christie Hospital is to get back the £6.5m of charity cash it lost in the Icelandic banking collapse.

It is understood that the money will be paid back by the government via the NHS.

It follows a huge public outcry and an M.E.N-backed petition signed by 100,000 people. The news was today greeted with delight. The world-famous Manchester cancer hospital had started legal action to recoup the cash after a bid to reclaim it through the Financial Services Compensation Scheme was rejected.

That action has now been halted.

The money will come from the NHS North West, but bosses there insist no other services or plans will be compromised.

The M.E.N understands from political sources that the money is actually a cash injection from Whitehall. It has been channelled through the NHS to stop a flood of claims for reimbursement from other organisations.

Caroline Shaw, chief executive of The Christie, said: "We are delighted. We're pleased that this result finally brings the issue to such a positive conclusion for cancer patients.

Benefits

"We were taking our case to judicial review and the legal opinion was that we had a very strong case.

"In view of this cash offer we have agreed to withdraw legal proceedings. We can now take forward important plans which will bring huge benefits to cancer patients.

"We have always been determined not to rest until this money was returned to us. The M.E.N's campaign has had a real impact and we are so grateful for the newspaper's superb support.

"I would also personally like to thank each and every one of the 100,000 people who got behind the campaign for their fantastic support. As an organisation we rely heavily on people's generosity to help fund our work, and with continued support we can go on to save more lives."

The £6.5m was `lost' after the collapse of Kaupthing, Singer and Friedlander - a UK-regulated Icelandic bank. The cash had been invested in the bank last May and July after expert financial advice.

Most of the money had been donated by patients and their families.

In March, the M.E.N launched a campaign to back the hospital's fight to recover the cash.

Compensated

We urged readers to sign an online petition calling on Gordon Brown to intervene and force the FSCS to change its decision.

The FSCS - part of the Financial Services Authority - had refused to reimburse the hospital.

It claimed FSA rules meant it could only give money back to individual investors and small businesses.

But the House of Commons' influential all-party Treasury Committee recommended this year that charities which lost out should also be compensated.

Now NHS North West, the strategic health authority for the region, has announced that it will be giving The Christie the £6.5m.

It says it has `identified opportunities from across its building development schemes to find a solution for The Christie'.

Develop

It added that the money would not compromise any other NHS services or plans and would enable The Christie to develop cancer services for patients in the region.

Mike Farrar, chief executive of NHS North West, said: "Our primary concern is to ensure the seven million people in our region receive the best possible health care services. Having such an important cancer centre potentially compromised in such an unprecedented event moved us to look at how we could help The Christie in these difficult times.

"The recent campaign by local people calling for the money to be returned to The Christie has been very powerful and very passionate.

"This was a unique situation which needed a unique solution, and I am pleased we have found a way to provide that for the people in this region."

A spokeswoman for NHS North West said the cash was coming from its `strategic reserve' - money for future building programmes, which is given to the authority each year by government.

She said the authority had an annual budget of £11.3bn and as not all of the capital projects had been allocated it was felt appropriate to divert £6.5m to The Christie.

Victory for 100,000-people power