Parliament's spending watchdog warned today that 71 NHS trusts in England went into the red last year, chalking up deficits worth more than £200m in breach of an obligation to break even.

Sir John Bourn, head of the National Audit Office, said he was concerned that the large deficits incurred by some NHS bodies might put at risk the financial stability of the health service.

The worst of the overspends was in North Bristol NHS trust where "poor financial management and ineffective corporate governance procedures" caused a £44.6m overspend in 2002-03 - the largest recorded by an NHS organisation.

The deficits came as extra resources were flooding into the NHS and ministers stepped up pressure to expand the service and reduce waiting times. The NHS budget in England rose from £47bn in 2001-02 to £53.5bn in 2002-03.

But the overspends in 71 trusts were more than matched by underspends in 104, leaving the NHS in England as a whole with a £96m surplus.

Sir John said: "Although, overall, the NHS successfully met its financial targets in 2002-03, I am concerned by the variation in financial performance and the large deficits incurred by some NHS bodies.

"Such deficits may put at risk the achievement of overall financial balance of the NHS if they are not matched by surpluses elsewhere in the NHS."