PLANS to build a new £36m hospital in the New Forest have cleared their final hurdle.

The government has given the project the green light after health chiefs signed a deal with the company that will build the 104-bed complex.

It will be built on part of the Ampress site in Southampton Road, Lymington, under a scheme known as a private finance initiative (PFI).

Known as the Lymington New Forest Hospital, it will serve 180,000 people across the district, plus the huge number of tourists who pour into the area every year.

New wards will replace the existing Lymington Hospital, which is generally regarded as too old to meet the needs of the modern NHS.

The government's Private Finance Unit has approved the scheme after New Forest Primary Care Trust signed an official contract with its PFI partner Ryhurst Ltd.

John Richards, the trust's chief executive, said: "The project has been long and complex and we are delighted that building work can now start.

"We want to provide a modern hospital with quality services for the people of the Forest and look forward to it opening in 2006."

The announcement was also welcomed by the League of Friends, which will contribute £1.5m towards the scheme.

Chairman Robert Jackson said: "We have all waited a long time for this new hospital and are all delighted that the trust has successfully steered the project to the point where construction can begin."

As reported in the Daily Echo, the hospital will occupy a 9.7-acre site at Ampress Park, formerly the home of Wellworthy Engineering.

Facilities will include a rehabilitation centre, a minor injuries unit, a diagnostic and treatment centre and a six-bed maternity unit.

Trust project manager Paul Johnson said: "We expect work to begin in earnest shortly."