The South West Peninsula Health Authority decided not to join the hospitals after it said too many local people were against the proposal.

The Liberal Democrat MP Nick Harvey said his faith in the NHS was "restored" after the decision not to merge the North Devon Hospital in Barnstaple and the Royal Devon and Exeter Hospital at Wonford 50 miles away.

The health authority decided unanimously to reject the scheme.

Significant milestone

"I'm delighted, and my faith in the NHS has been considerably restored," said Mr Harvey.

"It is important that the NHS secures the consent of the public to the way it runs things.

"That has been demonstrated in their acknowledging the public will over this merger."

Anthony Farnsworth, the director of strategic partnerships for the health authority, said the decision represented a significant milestone.

He said he expected Health Secretary Alan Milburn to give the decision the go-ahead.

"We cannot predict what the Secretary of State will say but we can have a reasonable expectation that he will pay attention to our recommendation," said Mr Farnsworth.

"The Health Service can't seriously face the prospect of pushing ahead with a decision in the face of large-scale public concern."

MP Nick Harvey welcomed the news

There have been three months of debate, opinion polls and public meetings over the plans.

More than 20,000 people in north Devon signed petitions opposing the idea.

The board of the Northern Devon Healthcare Trust had voted 6-3 in favour of the merger.

The board said the move would improve patient care through a more efficient use of resources.

But a survey of doctors, consultants and health staff at the Barnstaple hospital showed almost 90% of those who returned ballot papers were against the idea.