Campaigners had been fighting to save Battledown Ward
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Specialist children's services in Gloucestershire are to be concentrated in Gloucester, under plans agreed by health bosses.
Three primary care trusts (PCTs) met on Tuesday after a three-month public consultation on the proposals.
They announced plans to locate specialist in-patient care for children and neo-natal intensive care at Gloucestershire Royal Hospital.
The 26-bed Battledown ward in Cheltenham will remain open.
Although in-patient services will move to Gloucester, the assessment unit in Cheltenham will be open longer and other services, such as day-case surgery, remain unaffected.
The PCTs involved - Cotswold & Vale, Cheltenham & Tewkesbury and West Gloucestershire - also plan to recruit six new community nurses to provide home care for sick children.
The PCTs have had to compromise on "on access to services for some in order to ensure a continued high-quality specialist service in the county for all children and their families".
They are now looking into how to care for children overnight who do need clinical care but do not require medical supervision.
Options being considered include: a new overnight nurse-led unit at Cheltenham Hospital; a nurse-led hospital at home scheme or management through the in-patient service at Gloucestershire Royal Hospital.