Northampton General Hospital has pulled out of a bid to become an elite hospital because of below-par basic services and patient criticism.
The hospital has been preparing for Foundation Trust status for two years by trying to hit targets such as reducing MRSA cases and accident and emergency waiting times.
But the hospital missed these key targets in recent months, while a National Patient Survey showed patients had major concerns about cleanliness which has led management to withdraw from the process.
Helen O'Shea, the hospital's acting chief executive, said the board pulled out so that Monitor – the Foundation Trust regulator – would not have the chance to refuse the application, an outcome which would have heaped embarrassment on the hospital.
She said: "It was a tough decision. It was disappointing, but Monitor would have found the holes in us potentially.
"We have looked at the perception that other people will have of this organisation from figures like cases of MRSA and patient opinions.
"Patients don't think the basic service is good enough. The figures put us in a bad light when you compare us with other trusts.
"It was generally a complete feeling of 'not good enough' and if that's what the patients are feeling then we have to listen to that and do something about it rather than continue on regardless."
Like all hospitals in the UK, the Department of Health expects Northampton General to achieve its vision of locally-accountable Foundation Trust status.
Reaching that level is seen as confirmation that a hospital is giving high quality treatment and services.
But four new MRSA cases in June and an unfavourable audit of accident and emergency transit times – which have since returned to normal – have cast doubt on how the hospital would be judged.
The final straw was a survey of about 400 patients which raised issues on general cleanliness and a lack of information given when people were discharged.
Mrs O'Shea said the results came after the hospital saw patient numbers rise by 2,700 – or 15 per cent – over normal levels between April and June.
She also emphasised that the hard work by staff would not be wasted and both its detailed business and governance plans, produced as part of the bid, will be used when it re-applies to be a Foundation Trust next year.
She said: "The work we have done, and will do, puts us in a much stronger position going forward into a future application."