Scotland's biggest ever hospital building project will be paid for with £842 million of public money, it was announced today.

The New South Glasgow Hospitals complex is expected to provide 1,109 beds for adults and 240 beds for children in single rooms on the site of the existing Southern General Hospital.

Announcing the development at the STUC conference in Inverness today, First Minister Alex Salmond said: "By funding the entire project through public finance, we are ensuring it is deliverable, affordable, sustainable and represents best value for money for the taxpayer.

"Not only that, but patients throughout the west of Scotland will reap the benefits of single-site hospital care, providing seamless and specialised treatment."

He said the Carbon Trust had worked with the NHS to ensure good transport links and a positive contribution to the environment.

The SNP oppose the use of private sector funding - through private finance initiative (PFI) or public-private partnership (PPP) schemes - to build schools, hospitals and other projects.

The Scottish Government wants to replace it with a non-profit body - the Scottish Futures Trust - which would raise funds in private markets.

Public health minister Shona Robison, visiting the Southern General Hospital, said: "This will be the largest single investment in health services ever undertaken in Scotland and will transform healthcare for both patients and staff."

Glasgow SNP MSP Bashir Ahmad added:

"This is great news for Glasgow and the West of Scotland. The new Southern General will clearly make a significant contribution to the provision of health care for the people of Glasgow and the children of the West of Scotland.

"It is also good news to hear that it will be funded by the less expensive public finance system rather than through the wasteful Private Finance Initiative which sees private companies making huge profits from our public services .

"Along with a council tax freeze, reduced prescription charges, no graduate endowment and increased payments for free personal and nursing care, this announcement shows the SNP Government is delivering for Glasgow and Scotland."