Work has begun on a two-stage project which will see a new North Walsham hospital up and running this autumn.

And a leading supporter has called on those uneasy about the demolition of the existing war memorial hospital to look to the future, and not cling sentimentally to the past.

But Brian Elliott, chairman of the community involvement panel which helped draw up the scheme, pledged that the first world war heroes, in whose memory the hospital was built, would be remembered with the prominent re-siting of the old hospital's memorial stone and plaque.

A �1.6m revamp of Rebecca House, the former mental health in-patient unit, is under way to provide outpatient services, clinics and administration offices ready for this spring.

And plans were due to be lodged this week for a �3.5m, 24-bed intermediate care ward, to replace the 18-bed unit in the current hospital which will be knocked down.

Mr Elliott, who is also chairman of the hospital's league of friends, said the new hospital, to be known as North Walsham and District War Memorial Hospital, would be linked to Rebecca House and would meet 21st-century health needs.

The current hospital, built in the early 1920s, was no longer 'fit for purpose,' he said. Corridors were too narrow to move beds out of wards, NHS regulations meant that it could not accommodate as many as 24 beds, nurses couldn't see from one end of a ward to the other, and the building contained some asbestos.

The new hospital was 'fantastic news' for residents, said Mr Elliott. 'I'm very excited - people should be very pleased about this. Technology has moved on and we can't stay static.'

On Tuesday he was due to discuss the re-positioning of the original memorial, which is embedded in a hospital wall, with one idea being to have it freestanding, mounted on brick or stone, visible as people approached the hospital.

The wooden plaque hanging inside the building could be placed within the link between the hospital and Rebecca House.

Design work for the second stage of the redevelopment is ongoing and a full business case will be put to the NHS Norfolk board in February - with the aim of completing the whole scheme by the autumn of 2011.

NHS Norfolk's assistant director of estates commissioning, Graham Copsey, said the renovation of Rebecca House was the first phase of the hospital project.

'As well as renovating the building we are remodelling the interior and creating clinical space that is appropriate for 21st century health care.'

Mr Copsey said public suggestions through the community involvement panel and exhibitions had been invaluable. Intermediate care is for patients who need to be looked after in a ward but do not need to be in an acute hospital such as the Norfolk and Norwich or Queen Elizabeth, King's Lynn. They include older and more frail people recovering from operations or who need a period of closer care for long term conditions which have suddenly got worse.

The building work is being carried out by Mansell Construction Services, which is part of Balfour Beatty. It is being managed by an organisation called Norlife, which is a 20 year partnership set up between some of the local public sector authorities in Norfolk and the private sector developer, Guildhouse.