Reactions have been positive to the news that a £3.8m plan to redevelop Stamford Hospital will be taken forward.
Health watchdog Monitor backed the Peterborough and Stamford Hospitals Trust plan after a thorough investigation into its finances.
The scheme to redevelop part of the Stamford Hospital site and find a partner to run the rest was put on hold for several months while the investigation was carried out.
But it will now go before the trust’s board on Tuesday, with final approval likely from its council of governors on October 9.
Michael Dronfield is chairman of the Friends of Stamford Hospital, which raises money to support the facility. He said: “I think the news was very good. We were all fearful that the trust might have been advised to close the hospital.
“It’s good that they are not bringing in an administrator and that they have confidence in the senior management team. The shackles have been taken off in a way and they are now in a position to start investing again.”
Mr Dronfield said he fully supported the business case to redevelop Stamford Hospital.
He added: “As far as Stamford is concerned it makes sense. The only bit that I don’t like is that it doesn’t include keeping the operating theatre open. We think that was a mistake.”
But Mr Dronfield added: “We are happy to provide what funds we have to help support new initiatives at the hospital.
“There has been a lot of talk but now it is time for some action.”
Monitor met with Stamford Town Council several times during its investigation.
Mayor of Stamford Brian Sumner (Con) said he was pleased the trust would be given the chance to implement its plan for Stamford.
He added: “It did look to me like we were going to be made the sacrificial lamb.
“There always should be a hospital in Stamford and that is why our MP Nick Boles took an interest.”
Mr Boles had written to Monitor to suggest Stamford Hospital be placed under a different trust if the current one could not be trusted to run it.
But Coun Sumner said: “The Monitor report is a much better solution than transferring it to another trust.
“I am confident in the business case. I think Monitor have taken a very keen interest. They visited the council twice so we could air our views which I think helped.
“It’s on an equal footing with the news that Stamford had been named the best place to live in Britain.”
The trust’s interim chief executive Dr Peter Reading said: “Provided we gain the agreement of our governors, I anticipate the coming months will be taken up with establishing a project team with a view to beginning the redevelopment programme in 2014.”