EAST Lancashire hospitals are facing a spiralling number of claims for clinical negligence, health trust chiefs have revealed.

The bill runs to well over £1million in the last two years -- and nationally the NHS faces forking out £4billion, enough to build 16 new hospitals.

MPs called for reform when they heard the "staggering" statistics.

Home Secretary and Blackburn MP Jack Straw said the Government needed to look at a system where lawyers' fees often exceeded settlements.

And Ribble Valley Tory MP Nigel Evans said: "This is staggering. We must take action. We are going to be spending more on compensation than on patient care."

Peter Pike, Labour MP for Burnley, added: "I am worried. Money spent on compensation cannot be spent on patient care. We need to find a better and more equitable system."

Claims in East Lancashire in the past year have covered botched operations requiring further surgery, failure to see a patient and inappropriate treatment.

Richard Gildert, director of nursing and quality with Blackburn, Hyndburn and Ribble Valley NHS Trust, revealed the trust had settled negligence claims for about £450,000 in 1999 and 2000.

And they were expecting to pay out £500,000 a year over the next two to three years.

The number of claims was undoubtedly rising, he said. People saw insurance company advertisements on TV, and in any case litigation was much easier these days.

He pointed out that NHS Trusts had inherited a backlog of claims when they took over from the old health authorities in the 90s and in East Lancashire they were still dealing with claims dating from 1996 and 1997.

"The system is much better now," he said. "We aim to deal with up-to-date claims with quality, responsively, and with a quick turnover.

"We aim to learn lessons from claims and complaints and to avoid them in future."

NHS insurance premiums were included in the global settlement figures, he confirmed, and money was not sucked away from other clinical areas to compensate.