Plans for a new "super hospital" on Teesside have been scrapped.
Work had been due to start on the £460m 660-bed project in Wynyard Park, north of Stockton, in 2012 and be completed in 2015.
But the plans have now been axed by Treasury Chief Secretary Danny Alexander, along with 12 other schemes nationwide, saving a total of £2bn.
The Labour MP for North West Durham, Pat Glass, told the Commons the decision was "devastating".
She said: "The people of the area have been expecting this development for five years, it was a planned commitment and it was going to have a massive impact. It is devastating."
The development was to have replaced out-dated hospital buildings at Stockton and Hartlepool.
The hospital was also to have provided care closer to home for people in Hartlepool, Stockton and parts of Easington and Sedgefield.
Plans also included the development of three integrated health centres in Hartlepool, Stockton and Billingham and enhanced GP facilities in Yarm.
Mr Alexander said only projects approved by the previous government, which were "affordable and were genuine priorities", would go forward.