The long-running row whether the new Durham hospital should have been built with private or public funds re-ignited yesterday, on the day Prime Minister Tony Blair carried out the opening ceremony.

The public service union, Unison, claims that their criticism of private funding for NHS hospitals has been vindicated by changes in Treasury rules.

Unison argues that under the new rules the £97m University of Hospital of North Durham - built with fewer beds than the obsolete Dryburn Hospital it replaced - would not have met the Treasury's criteria for private finance initiative (PFI) schemes.

The union blames the bed shortage on the need to make the deal attractive to shareholders.

Only last week seven planned operations were cancelled because of a shortage of beds.

One of the reasons why the North Durham trust only got two stars instead of three this week was the number of operations cancelled.

But Government ministers maintain that PFI hospitals - which are built by the private sector in exchange for hefty annual service charges - represent good value.

Unison general secretary Dave Prentis said: "The changes proposed by the Treasury vindicate what Unison has been saying about PFI for years - that fudging the figures has made it look as though the private finance option is better value for money than the public sector alternative when the rules have not provided an opportunity to prove otherwise."

Unison called on the Government to halt all new PFI projects which a detailed analysis is carried out on whether the tens of billions of pounds invested in existing PFI projects is delivering value for money.

Unruffled by the new controversy, a beaming Tony Blair, accompanied by wife Cherie, toured the hospital, greeting patients and staff.

The Prime Minister was introduced to Bill Gilmartin, 78, from Chester-le-Sreet, who was being cared for in the coronary care unit after collapsing at home.

Afterwards Mr Gilmartin said: "They seemed really genuine. They wished me well."

The Blairs also visited proud new mother Clare Hunter, 25, from Conset, who had given birth to her first child, Chloe, just six hours earlier.

Mr Blair joked that he was worried that his wife was getting "broody" again when Cherie cradled the tiny baby.

Clare said maternity staff had been "brilliant."

Speaking in the hospital's crowded restaurant Mr Blair praised the dedication of staff and the "quite amazing" new facilities. "I just wanted to pay my tribute to you and thank you for all the work that you do," he said.

"This is part of a series of hospitals being built up and down the country, 70 or 80 of them and we will try to do the same for primary care premises," Mr Blair added.

After the ceremony, North Durham chief executive Steven Mason confirmed that an extension was still being considered, along with plans for closer links with other County Durham hospitals.