Work has started on a replacement for a hospital described as a "crumbling old Victorian asylum" in south Oxfordshire.

Bulldozers are now levelling a site in Tilehurst, Reading, to make way for a 203-bed hospital with up-to-date facilities for mental healthcare to replace the Fair Mile, at Cholsey, near Wallingford.

Fair Mile Hospital, which has more than 200 in-patients in old-fashioned dormitory accommodation, is due to close early in 2003 when the new hospital is completed.

Most of its patients will be transferred to Prospect Park, with the rest being cared for in smaller care homes in Reading.

Lorna Roberts, the chairman of Berkshire Healthcare NHS Trust, which will run the new hospital, said: "It will be a world away from the crumbling old Victorian asylum at Fair Mile. At last we are to have a state-of-the-art centre."