THE new Sick Kids hospital has been hit by a further delay after a Scottish Government U-turn ruled out public funding.
• VISION: An artist's impression of the new Sick Kids, which is now not expected to open until 2015 at the earliest
The much-needed facility was already running late from its original 2013 opening date and was set to open in the summer of 2014.
Now Holyrood's decision not to pay the cash directly and instead seek private money means it will be 2015 at the earliest before it is operational.
In addition, unions said the implications of a funding formula they describe as "PFI in all but name" could harm the hospital long-term.
Privately, health chiefs in Edinburgh are said to be livid that ministers have opted for funding from the controversial and as yet untested Scottish Futures Trust, while in Glasgow the 840 million Southern General, which includes a new children's hospital, will be entirely publicly funded.
Online poll: Is the Scottish Government right to seek private funding for the new Sick Kids?
NHS Lothian will now have to scrap plans to formally submit a planning application for the land at Little France as it tries to work out how it will pay for the facility.
As part of the Scottish Government's budget, health projects valued below 750m will be funded through the non-profit distributing (NPD) model. That is designed to "transfer risk and exert private sector discipline both during the construction of a project and throughout its lifetime".
It is that phrase which insiders say has set alarm bells ringing within NHS Lothian.
They are concerned that any private funding and long-term involvement will lead to a repeat of the private finance initiative (PFI) deal which built Edinburgh Royal Infirmary.
Under that agreement, NHS Lothian will pay builder Consort a total of 1.26 billion by 2028 but never own the hospital.
Tom Waterson, chairman of Unison's Scottish Health Committee, said: "We've yet to see any evidence that the Scottish Futures Trust is anything other than PFI by another name.
"We are extremely disappointed by this. We thought the SNP would have learned the lessons from the ERI deal.The last thing we should be doing is lining the pockets of more private companies."
He added that if private sector influence was to endure beyond the building, as the NPD description suggests, it could lead to poor levels of maintenance at the hospital.
Jackie Sansbury, chief operating officer for acute services for NHS Lothian, said: "NHS Lothian remains fully committed to building a new world-class hospital for children.
"This funding announcement demonstrates the Scottish Government's commitment to moving this project forward and over the next few weeks we will be working closely with our colleagues at Scottish Government on what this means for this important development."
A Holyrood spokeswoman said: "The Scottish Government is fully committed to the delivery of the Royal Hospital for Sick Children.
"The substantial cut in our capital budget means that difficult choices have to be made. We have taken the decision that the Royal Hospital for Sick Children in Edinburgh will now be financed more effectively through NPD."