Malvern Hills District Council could pay £10m for a new community hospital to be built in Malvern to prevent the project having to be funded under a Private Finance Initiative.

The news comes after the council confirmed it has withdrawn an offer to allow the new hospital to be built on their land at Pickersleigh Road, due to "overwhelming views of Malvern residents". It is now earmarked for Seaford Court.

Under current proposals, the new 24-bed hospital would need to be funded with help from a private or independent sector partner who could construct the building and provide day-to-day services like maintenance and security.

But at a meeting of Worcestershire County Council's Health Scrutiny Panel yesterday, Tom Wells, leader of Malvern Hills District Council, said the council would investigate becoming a partner with the help of a "prudential borrowing" option from the Government.

"I am sure the district council would be interested in going into a partnership at a cheaper rate than a commercial PFI operator," he said.

"It would keep public money in the public sector and could make the difference to getting the much sought-after Minor Injuries Unit as the buck might go a bit further."

Mike Ridley, chief executive of South Worcestershire Primary Care Trust, was reluctant to commit to a Minor Injuries Unit as he said research suggested it would only serve nine people a day.

"But I will take into account the overwhelming view of the local population to have one," he said.

"If Mr Wells' idea comes into play then it might give us more money to play with."

A public consultation into the new hospital is continuing and ends on Monday, March 7.

The public can have their say on the proposals at two meetings to be held at the Forum Theatre in Malvern - the first one is at 7pm on Monday, February 21, and the second is at 2pm on Tuesday, February 22.