Health bosses today confirmed they were in negotiations with one of the original bidders for the £1.3 million redevelopment of Bishop’s Castle Community Hospital.

Concerns were raised by residents in the town when work on the hospital ground to a halt last month after Frank Galliers Ltd, the building firm which had been contracted to do the work, went into liquidation with debts of almost £10 million.

But bosses at Shropshire County Primary Care Trust said today they were committed to successfully completing the project and they hope work would resume as soon as possible.

Mathew James, a spokesman for the county PCT, said: “Shropshire County Primary Care Trust is currently in negotiations with the second lowest original tenderer for the Bishop’s Castle project.

“These negotiations are expected to be completed very soon with a view to work continuing on-site in March.”

It comes after Shropshire Council chiefs vowed that two other projects, Oswestry’s new £7 million Oswald Park leisure development and the £600,000 refurbishment of Market Drayton Market Hall, would also be completed.

The vow was made following a creditors’ meeting yesterday which established that Frank Galliers, one of the area’s biggest building companies, owed cash to more than 400 creditors.

Directors of the Shrewsbury company also explained why the firm ceased trading with the loss of more than 130 jobs. They said contractual problems had brought about the difficulties.

Since the business hit financial trouble, work has stopped on projects in the county which the firm was involved in.

Laura Rowley, director of resources at Shropshire Council, said: “The council is committed to completing the two projects being undertaken by Frank Galliers- the new leisure centre in Oswestry and the refurbishment of Market Drayton market hall – and are taking the necessary steps to ensure this happens.”

Oswestry’s new leisure centre had been described as the former Oswestry Borough Council’s ‘legacy’ to the town.

Work has stopped on the new leisure centre site for weeks and today there was still no activity on what council chiefs hope will be Oswestry’s showpiece leisure facility.