An independent committee has accused the Department of Health of making "catastrophic" decisions over the decision allow a new hospital in a city, while a private firm was being hired to run another one 24 miles away.
According to the Commons Public Accounts Committee, the Peterborough and Stamford Hospitals Trust had accumulated a deficit of more than £45 million by the end of 2011/12.
The trust's financial position is now so serious that, even if it achieves challenging annual savings, it will still require significant financial support of up to £26 million a year for the next 30 years to remain viable.
More top news
David Cameron sets out his case for British jets and drones to strike so-called Islamic State targets in Syria in an address to the Commons.
A drink-driver who "destroyed the lives" of two mothers was allowed to have his curfew lifted so he could go on a foreign stag party.
Demonstrators have blockaded the entrance tunnel to Heathrow Airport in apparent protest at plans to build a third runway.