A £219m redevelopment fund for St Helier Hospital has been axed, Health Secretary Jeremy Hunt has said.

Liberal Democrat MP Tom Brake has accused the Government of a “u-turn” after receiving “an almost cast iron assurance” from Chancellor George Osborne that the money was coming.

On June 17, Mr Osborne said: “We did commit to that hospital project, and provided that it continues to represent value for money, which I am pretty clear that it does, we will go on providing that support.”

But in the latest twist in a five-year saga regarding the hospital’s future, a letter to Mr Brake from Mr Hunt in August said the Government was not “currently considering any capital or financing applications” for the site.

Mr Brake, MP for Carshalton and Wallington, said: “It is very depressing to see that, having secured pretty strong support for St Helier from the Chancellor, within a few weeks Jeremy Hunt has performed a sharp u-turn.

“We are very disappointed, having got an almost cast iron assurance.”

The coalition Government re-approved the £219m funding for St Helier in October 2010, after the previous Labour administration pledged support in March that year.

But the project was delayed as part of the Better Services Better Value review of south-west London healthcare, which caused community anger by recommending the closure of accident and emergency, maternity and children’s units at St Helier.

In February 2014, the then-chief executive of Epsom and St Helier University Hospital NHS Trust, Matthew Hopkins, said the business case for redevelopment needed to be “revisited”, and committed to spending £90m over five years on St Helier.

In April this year, two Deloitte consultants were recorded discussing plans to replace both hospitals with a new 800-bed “super-hospital” in Sutton, although this suggestion was rejected by the Department of Health (DoH) as too expensive.

An estates review of Epsom and St Helier, published in June, suggested years of delays had affected services at the hospital.

The review also said the trust was “committed to retaining both Epsom and St Helier hospitals for at least the next five years”, but that £500m investment would be needed for buildings that are “no longer fit for purpose”.

Georgia Lewis, Keep Our St Helier Hospital campaign organiser, said: “The staff are doing a great job under some horrible circumstances.

“Everything is up in the air. The hospital has been upgraded piecemeal, but there is not an overall strategy.

“After five years, what then? MPs and local councillors could be lobbying the Government a lot harder.”

A DoH spokesman said: “The trust is continuing to work with the community and local health partners to review all the options available for improving its estate before submitting any further capital or financing applications to the Government.

“Any application will be considered in due course.”