PATIENT services across Gwent may be cut as health bosses try to cope with a shock multi-million pound bill for care outside of hospital.

In Newport, dismayed city health chiefs are warning of "significant disinvestment" to help meet a £3 million overspend, the result of an Assembly u-turn on guidance over rising care costs triggered by a 2006 High Court ruling.

Newport Local Health Board predicted it would balance its books for 2007/08, until the Assembly advised last month that the spiralling costs of what is known as continuing healthcare - care provided to patients in nursing homes - must be included in end-of-year estimates.

Until then the Assembly's advice had been not to include it. Now, many LHBs in Wales face substantial deficits they can do little to remedy so late in the financial year.

Monmouthshire LHB forecast a £300,000 surplus and hoped to make early part-repayment on a loan covering previous deficits.

But an estimated £1m extra in costs mean it now faces being £700,000 in the red.

Details of financial consequences for Torfaen, Blaenau Gwent and Caerphilly LHBs are not yet available, but all now face deficits.

The total bill across Gwent could top an estimated £8m.

The Assembly has instructed LHBs to draw up financial recovery plans and Newport LHB will meet next month to discuss options for recovering this late financial setback. But members are deeply unhappy.

Chairman Sue Kent spoke of an unacceptably late change of guidance and mixed messages through the Assembly's regional offices, on dealing with the financial burden of continuing healthcare.

Vice-chairman David Thomas called the situation "crazy" and one which will have "a fundamental effect on the provision of healthcare in Newport."

Board member Keith Dunn said taking away services that "make a difference to people's lives is clearly unacceptable."

The problem arises from the Grogan judgement, a landmark ruling in a case pursued by a patient in England, Maureen Grogan, against her primary care trust, which had turned down a request to fund her continuing healthcare needs while she was in nursing care.

Since then, continuing healthcare costs have increased several-fold, due to a surge in new cases and hundreds of case reviews.

In Newport alone, there were 186 referrals during April-November last year, against just 31 in the same period in 2006.

Health boards' finances 'blown off-course' CHIEF officer of Gwent Community Health Council Cathy O'Sullivan said : "Local Health Boards in Gwent have made considerable efforts to break even which have been suddenly blown off course.

They have been landed with an all-Wales deficit too late in this financial year for them to plan accordingly.

"We are naturally concerned about the implications for patient treatment and care.

Giving elderly people the care they deserve is a substantial and increasing cost to society and there is no place for short term expediency.

"Expenditure must be planned and the NHS funded for the long term if it is to cope."