An NHS chief has admitted for the first time hospital trusts will miss their financial target this year as forecasts predict they are on course for a combined deficit of nearly £1 billion.
Jim Mackey, head of NHS Improvement, said efforts are now focused on "containing this to as manageable a number as we can" as trusts struggle with ballooning deficits.
Figures obtained from trusts by the Heath Service Journal (HSJ) show they are heading for a year-end deficit of around £970 million.
This is far higher than the £690m deficit predicted in November and would significantly breach the £580m maximum deficit "control target" set by national leaders.
The numbers, which have been collected from all but five of England's 237 NHS trusts, come ahead of the official figures next week and suggest their financial positions have deteriorated as the year has progressed.
However, it is understood the regulator, NHS Improvement, has managed to bring some of the forecasted deficits down following discussions with trust boards.
Although it is not clear to what extent the overall forecast has been reduced, or by what means.
Mr Mackey told HSJ: "We'll not hit £580m and I think it's about containing this to as manageable a number as we can.
"Ever since quarter two we've not really expected to hit that number. We need to all work as hard as we can to keep it as low as possible."
The numbers are likely to alarm officials at the Department of Health and the Treasury, as they threaten to exceed the £800m central reserve which the service can dip into to cover overspends.
Although Mr Mackey says he is confident the deficit will be within the £800m limit.
The HSJ also reports more providers are expected to be put into financial special measures once the official figures are published.
Richard Murray, policy director at the King's Fund, said: "There were risks that the better financial performance among NHS providers seen in the first quarters of 2016-17 might slip over the year, and these risks appear to be materialising.
"With performance challenges rising in the NHS in January, trust finances may yet deteriorate further.
"With the forecast provider deficit rising past the £800m risk reserve top-sliced from commissioners at the start of the year, the ability of the DH (Department of Health) to live within its overall budget is once again in question."
Around 40 trusts have reported significant deteriorations compared to their previous forecasts, with 12 reporting deficits of more than £10m, according to the report.