A growing problem with bed-blocking in hospitals helped drive health bosses to manipulate waiting list figures.

The Registered Nursing Home Association claims Surrey and Sussex Healthcare NHS Trust would not have tried to falsify numbers if it had been able to maintain the flow of patients.

The association says the struggle to meet tough Government waiting time limits coupled with not having enough free beds available meant the trust took "inappropriate" steps to meet its targets.

Thousands of nursing and care home beds have been lost in the South East between 1998 and 2001 because owners are not being paid enough money to run them.

On average, social services in East and West Sussex and Brighton and Hove pay a home about £350 a day per patient.

Home owners says they need at least £450 a day to provide a basic service and stay open.

Frank Ursell, the association's chief executive for the South-East, said: "Lack of funding for nursing and residential care home places has been preventing many older patients from being discharged once their hospital treatment has been completed.

"As a result, beds have been unavoidably blocked and people waiting to be admitted for planned treatment are having to wait longer than necessary.

"Of course there is no excuse for cheating.

"But the policy probably made it more tempting for a minority of managers to fiddle the books."

A National Audit Office investigation found almost 1,800 patients at the trust were "inappropriately" suspended from waiting lists in 1998 and 1999.

The investigation alleged patients awaiting operations were phoned by staff to discover when they were on holiday and then offered those dates for treatment.

When they turned the dates down they were sent to the back of the queue.

The cover-up came to light when Ken Cunningham took over as trust chief executive from Isobel Gowan in 2000.