Cherwell District Council has reiterated its commitment to build Bicester a new community hospital - but health bosses say they still have no plans for one.

The council wants to build a hospital on the town's newly-approved south west development to lease back to the Oxfordshire Primary Care Trust.

Housing developer Countryside Properties has promised to donate the land free of charge.

The idea was prompted by a similar scheme in Worcestershire, where Wychavon District Council built a community hospital in Pershore for £6.7m.

Council leader Barry Wood said: "Cherwell is very interested in pursuing a Wychavon model - which boils down to where a district council builds a hospital and then effectively leases or rents it to the health service for a lower rent that is equivalent to the interest the council would have earned had it kept the money in the bank.

"This way the council rate payers do not lose out but society at large gains a new hospital."

But he added the idea would only work if the PCT wanted and could afford to run a hospital.

He said Cherwell had the money in the bank to fund the project if necessary.

But he added: "We are not proposing to help them pay the running costs. It would not be valid for councils to do the work of the NHS."

Last week, the council announced it wanted to sponsor a multi-million pound academy on the south west development to raise educational standards.

Mr Wood said: "The advent of the south west development gives Cherwell opportunities to pursue innovative solutions to social problems that are usually outside the remit of a district council."

An Oxfordshire PCT spokesman said a delegation of staff had visited Pershore's hospital in the past few weeks for "research" purposes.

But she added: "The PCT's proposal is to build a primary care centre with increased day hospital facilities and inpatient beds in a local care home.

"Although it is discussing with Cherwell other options that could be available there are no plans to build a standalone hospital in Bicester.

"The PCT does not have the money to run services in a stand-alone hospital unit."

She said a public meeting was due to be held to discuss the plans over the next few months.