Bishop Auckland's long-awaited new hospital passed an important milestone when builders completed the shell of the £67m development.

Now they are ready to start fitting out the interior, ready for the new Bishop Auckland General Hospital to take in the first patients on schedule, in early 2002.

Contractor Shepherds is dismantling the miles of scaffolding that obscure views of the four-winged building, which will accommodate 347 beds and bring all the hospital's services under one roof for the first time.

In February, the site's giant crane will be dismantled, removing a temporary landmark which has towered over Bishop Auckland since the summer of 1999.

Shepherds says the success of the contract has proved the value of a controversial Private Finance Initiative (PFI) arrangement, which uses private sector money to pay for public services.

The company's construction manager, Peter Hodges, said that savings brought through PFI had meant more money could be spent on patient care.

He said: "PFI is criticised in some places because they don't understand the extra value it brings. But by using innovation and being more efficient, we can release more money for equipment.

"The contract has gone exceptionally well. The most important thing has been that all the sub-contractors on the site have entered into the spirit and worked with us as a team."

Site security and safety officer Wilf Davison has a special reason for looking forward to the opening of the new hospital.

He started as a foreman bricklayer with Shepherds when the company built the hospital's maternity block more than 25 years ago, and hopes to retire when the present contract ends.

Wilf, 62, from Heighington, said: "I know how much this hospital means to the people of the area, and I am pleased to be working on it. When it opens, it will be a good time to go."

Paul Trippett, chairman of South Durham Health Care NHS Trust, said: "It has been an amazing 18 months watching the new hospital take shape.

"We are delighted with the progress that has been made, and the success of the project to date is a real credit to all those involved.