Health chiefs announced on Wednesday that a solution had been found to tackle Mid Yorkshire Hospitals NHS Trust's historic multi-million cash shortfall.

The Strategic Health Authority will cover £45.6m of the debt with the balance of £31.4m being converted into a working capital loan, which must be paid back by the trust.

Kirklees Primary Care Trust and Wakefield and District Primary Care Trusts will then provide a further £31.4m between them, over a three-year period, to meet some of the costs incurred in making the transition to the new Pinderfields and Pontefract hospitals.

Julia Squire, chief executive of the hospitals trust, said: "I'm delighted that this financial solution will allow us to draw a line under the past and we appreciate the SHA and PCT's support to make this possible."

She said the hard work of staff had helped the trust to improve its financial position and performance each year, adding: "We balanced our books for the first time in 2007-8.

"This created a real sense of confidence in the trust and enabled this solution to be reached. We now have the stability to move forward and serve the local people securely in the future."

Union officials and MPs welcomed the news. Adrian O'Malley, branch chairman of Wakefield and Pontefract Hospitals union Unison, said: "It makes a change to have some good news for once. The trust would never have been able to clear that debt and there would have been more job losses and cuts to services, than are already planned under the government's efficiency drive."

The Mid Yorkshire Hospitals NHS Trust provides services from Pinderfields Hospital, Pontefract General Infirmary and Dewsbury and District Hospital as well as day-case and nurse-led services from Clayton Hospital.

Wakefield MP Mary Creagh, said: "This £77m cash injection's great news for healthcare in our district. Local Labour MPs have put a lot of pressure on, behind the scenes, to get the government to draw a line under the trust's debt."