London hospitals are set to seek compensation after losing hundreds of thousands of pounds over a botched IT system.

Kingston Hospital has lost £500,000 before the new Care Records Service is even installed. The hospital was due to get the new system last month as the first step towards a huge electronic database.

But the plan was postponed after major problems at the Royal Free Hospital in Hampstead, which is more than £7million out of pocket after the fiasco.

It means Kingston is still having to pay IT contractors to maintain old systems that should no longer be in use. At least one of the contractors is demanding a full year's payment of £380,000, regardless of when the new system is actually installed.

The hospital's audit committee urged acting chief executive Alan Pearse to seek compensation from NHS London, which made the decision to defer the roll-out of the IT system.

It comes amid a growing crisis over the £12billion NHS computer project.

The scheme is already four years behind schedule and has caused chaos, with patients at the Royal Free forced to wait more than four months for appointments.

Bosses at the Hampstead trust are currently in discussions over whether to claim compensation. A spokesman for NHS headquarters in London said the Royal Free would be able to claim 60 per cent of the money back from local health trusts. He added that the Kingston problems are caused by "project management" issues.

Kingston hospital said: "While we are not currently seeking compensation, once we have an agreed go-live date we will be then be able to identify the full cost of the delay."

A spokesman for NHS London said: "We have not received any request for compensation yet."

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