Sagle Bernstein gave �11m to the hospital that cared for her sister

The budget for the new hospital will include �8m from the legacy - the subject of dispute.

When wealthy Sagle Bernstein, 82, died she left the money to the hospital in the seaside resort but agreement on how to spend it could not be reached.

Norfolk, Suffolk and Cambs Strategic Health Authority has now included the money in budgets for a new hospital.

The new hospital will combine a GP surgery, an eight bed dialysis unit, social services, day surgery, 24 beds and community health services under one roof.

Services in the new development 24 beds for post acute care, support of day surgery and direct GP admissions 19 day case beds or chairs Minor injuries unit Eight renal stations MRI scanner, plain film x-ray and ultrasound Modern facilities for an eight partner general practice Community staff base Mental health facility Base for social services

The authority claims the new hospital meets current population needs, future generations and was affordable.

Diana Clarke, chief executive of North Norfolk PCT leading the redevelopment, said: "We are really pleased work on the new hospital can now start in earnest.

"We have spent a lot of time putting the case together for the services we wanted."

Norfolk and Norwich University Hospital NHS Trust, which owns the current hospital and runs its services, are also involved in the new project.

Its chairman David Prior said: "We look forward to developing the plans and giving the people of north Norfolk a hospital that will be regarded as leading edge in terms of offering a one-stop approach to health needs."