NHS managers are pressing ahead with plans to close Bicester's community hospital despite this week's Government announcement of an extra £750m for community health services.

Just before Health Secretary Patricia Hewitt's announcement on Wednesday, the North East Oxfordshire NHS Primary Care Trust board approved an outline business case to replace Bicester's 12-bed hospital with a primary care centre without inpatient beds.

The trust said that although it would be looking at whether to bid for a share of the money, it would not let the announcement hold up its plans for the hospital.

The business case outlines proposals for a primary care centre with x-ray facilities, a minor injuries unit and a day hospital, where beds, if needed, would be rented from a nearby care home.

The scheme must be approved by the new South Central Regional Health Authority before the PCT can start work.

PCT spokesman Heather Barnett said: "Once they have agreed it, we can go out to advertise for a partner from the independent or charitable sector to work with us to build the facility.

"The PCT will obviously be looking to find out more about the announcements made by the Department of Health this week, but we will not let it delay our plans to proceed."

Ms Barnett added the Oxford Radcliffe Hospitals NHS Trust was proposing to provide community hospital beds at The Horton Hospital, in Banbury, as part of changes to services there, which could make Banbury, rather than Bicester, the main centre for community hospital care in north Oxfordshire.

Hospital campaigner and Bicester Labour councillor Les Sibley said he welcomed the extra Government cash, but was disappointed by the PCT's reaction.

He said: "This is good news. It's a shame it seems to be falling on deaf ears. This is about bringing services into the local community, listening to people and providing the services they want - not what the PCT wants.

"The PCT is hell-bent on providing a care centre that nobody wants."

"We need the PCT to really look at this extra money - they mustn't be blinkered. Local PCTs must now change course and embark on a campaign to deliver a new community hospital with inpatient beds."

Mr Sibley added he was considering holding a public meeting to update people in Bicester on the latest developments.