NHS trusts facing financial turmoil must be identified before they get to breaking point, the British Medical Association has said.

Dr Hamish Meldrum, chairman of council at the BMA, made his comments as Health Secretary Andrew Lansley seeks to turn around one trust losing £1 million a week.

South London Healthcare NHS Trust will be the first in the country to be put under the control of a special administrator tasked with putting it on a viable footing.

A further 20 trusts are facing serious financial difficulties which could ultimately see them in the same situation.

"There isn't any flexibility or financial leeway in the system," said Dr Meldrum.

"This really is a wake up call that one has to try to bring in some policies which actually find out about trusts that are in difficulty long before they get to the extent where you have to bring in the receivers effectively, or administration, and to sort out the problem.

"This has been on the horizon for a long time. The current financial stringencies mean it is much more likely to happen."

South London Healthcare NHS Trust, which runs three hospitals, has been criticised over standards of care and has run up deficits of more than £150 million over the past three years.

Despite efforts to improve its financial performance, it is still thought to be on track to lose between £30 and £75 million a year for the next five years.

Its chief executive was informed that the trust is likely to be put into the "unsustainable providers regime" which was introduced by the last Labour government but never before used.