THE first step towards the construction of a Teesdale market town's £10m community hospital has begun.

Demolition work has begun at the Teesdale Health Centre in Victoria Road, Barnard Castle, which is being cleared to make way for the new Richardson Hospital.

The Durham Dales Primary Care Trust (PCT) hopes the new hospital will open in early 2007.

David Anderson, modern matron at the Richardson Hospital, said: "It is really exciting to see work begin.

"The staff have been waiting for a long time on this project and this is the first concrete step in the process."

Christina Howarth, director of nursing for Durham Dales PCT, said "We are thrilled to see the project take the next step.

"We see this as a long-term investment in the health and well-being of the residents of Barnard Castle and Teesdale.

"We believe that the new hospital will have the potential to help us develop a much wider range of services for the people in Teesdale such as rehabilitation, palliative care, chronic disease management, falls service and blood transfusion."

The development is being funded through Care Partnerships 25 Ltd, a joint venture company owned by the public and private sector.