Bank failure costs hospital £6.5m

The charity raises money to help pay for research and patient services

Cancer hospital The Christie in Manchester will not get back £6.5m it invested in a failed Icelandic bank Kaupthing Singer and Friedlander (KSF).

The Financial Services Compensation Scheme (FSCS) decided the hospital did not meet its rules for a payout - unlike smaller firms and individuals.

The charity will apply for a judicial review of the decision.

It said it had a "moral and public duty" to reclaim the money raised by the public.

'Very disappointed'

At the same time The Christie is continuing to pursue its application for return of £1m of NHS exchequer money from Ernst & Young, the administrators of the KSF bank.

Caroline Shaw, chief executive of The Christie, said: "We are very disappointed that our application has been rejected.

"We must now move on to the next stage which is a judicial review aimed at overturning the decision and getting our money returned".

All The Christie approved development plans remain in place.

We must follow the rules set for us and our decision does not in any way reflect a judgement about the importance of the work the charity does

FSCS spokeswoman

The charity said no jobs or services would be affected by the news but future research developments and new buildings could be threatened.

The Christie has an annual budget of £153m. Its charity raises about £13m each year to help pay for additional patient services, research and new patient developments.

A spokeswoman for the FSCS said: "The FSCS protects individuals and some small companies.

"We must follow the rules set for us and our decision does not in any way reflect a judgement about the importance of the work the charity does.

"Following further work and careful consideration, the decision to reject the claim by the charity was upheld under the rules set for us by the FSA. We are not in a position to discuss further the details of the individual claim."