Kingston and Surbiton’s MP has welcomed the decision to give planning permission to a redeveloped Surbiton Hospital.

Edward Davey said: “It is such great news after years of campaigning and it looks like we have got the green light for the hospital.

He said he was satisfied there was enough room for a school and a hospital.

Asked about public desire for beds to return to Surbiton, he said: “Ultimately that is going to be a decision made by the GP commissioners. I don’t think it is likely they will do that because there are some excellent beds at the Tolworth Hospital site.”

But he suggested the Oakhill health centre site, next to the hospital, could be suitable for a care home when GPs moved out.

Asked whether Surbiton Hospital would help or hinder Kingston Hospital, he said: “I don’t think it will hurt it at all. It has the potential to help Kingston Hospital and we need to maximise that potential.

“Kingston Hospital has to make savings we all understand that. If we can deliver services in a high quality, modern state-of-the-art facility nearer to people, and therefore make savings, you have got great potential to help them.

“But it will only work if we work together across Kingston health economy to make sure as GPs commission services these services may be realised.”

Commenting on an 8,000 petition against similar plans in 1998 he said the objections were different, relating to the relocation of a war memorial, and had been dealt with in the latest application.

The role of Surbiton Hospital, opened with the help of donations from the public to pay for the bricks in 1936 but increasingly sidelined within the NHS, has been debated for years.

At the moment the services it provides include podiatry, neurology and cardiac rehabilitation but its survival has been uncertain for much of the past 15 years.

In 1998, residents objected to plans to demolish the hospital and move nearby GP surgeries, opticians and mental health services into a “one-stop health centre” leased back from a private company. Eight hundred people signed a petition opposing the move in 2000.

A few years later the hospital was instead due to be refurbished with chief executive Chris Butler pledging to talk to residents in 2003 about bringing in a minor injuries unit rather than close the building.

But closure was on the cards in September 2005 when Kingston Primary Care Trust (PCT), now led by chief executive Paul Holmes, said the deteriorating hospital was too expensive to run and planned to move elderly and terminally ill patients out as soon as possible.

More than 7,000 people, including MP Edward Davey, backed the Surrey Comet’s campaign to save Surbiton Hospital from being closed or mothballed and stop it selling off land to salve up its then perilous financial position.

Although the move to stop inpatients moving to Tolworth Hospital was unsuccessful – they left in November 2005 – the PCT decided in April 2006 not to close Surbiton but keep it open until 2009.

Inpatient beds were named the top priority for a new hospital in 2006 when staff and patients gave their views.

Management consultants McKinsey said a £15m new hospital was viable in 2008, prompting the current proposal.

But the report also said the rejuvenation of Surbiton Hospital could lose Kingston Hospital between £3.3m and £4.8m of income.