Image copyright PA The financial position at Royal Surrey was a “significant factor” in the decision, the trusts said.
In a statement, the Royal Surrey County Hospital and Ashford & St Peter’s spoke of “significant” pressures on the NHS.
The boards said both trusts needed to work “on their own individual areas of challenge”.
But the “deteriorating” financial position at Royal Surrey was a “significant factor” which had been taken into account, they said.
The statement said: “Both boards still believe that creating a bigger, stronger organisation is one of the best ways to secure and protect high quality services for patients.
“During this pause, we will continue to pursue those areas where it is sensible to look for savings and better ways of working together.”
Chairman at the Royal Surrey, John Denning, said it was not a decision the boards had taken lightly but that resolving their “immediate financial difficulties” was the priority in order to create a “solid foundation” for success.
Chairman of Ashford & St Peter’s Hospitals Aileen McLeish said: “Current predictions mean that the merger plans – as they are currently described – may not be able to realise the anticipated financial benefits – and hence benefits to patients – needed to make the merger viable.”