Health workers' co-operative Circle Holdings will become the first private firm to manage a state-funded National Health Service (NHS) general hospital after signing a contract to run Hinchingbrooke hospital in Huntingdon, England.

Circle will oversee an estimated 1 billion pounds of revenue over the 10-year contract, scheduled to begin in February 2012, it said in a statement on Thursday.

Backed by international investment funds, Circle has to pay off Hinchingbrooke's historic 40 million pounds of debt while maintaining existing medical services.

It will be the first time since the NHS was founded in 1948 that a private company will be running the full range of hospital services, including an emergency and maternity ward.

The hospital will remain NHS property, staff will remain NHS employees and patients will continue to receive NHS treatment free of charge.

This is not privatisation, said Stephen Dunn, policy director at local health authority NHS Midlands and East, and architect of the deal.

Hinchingbrooke is one of 20 NHS hospitals identified as suffering from financial problems and the deal could be a model for other turnarounds, said Dunn.

It's bound to be looked at closely by the NHS. This will be one of the options when organisations are struggling financially, in terms of being able to bring in new management to drive up the quality of services and ensure sustainability, Dunn told Reuters.

Circle beat outsourcer Serco to clinch the deal a year ago.

(Reporting by Tim Castle and Rosalba O'Brien)