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More than 500 managers and administrators face redundancy in a huge shake-up of the NHS across the north-east of England.

The proposed cuts will affect NHS trusts on Tyneside, Wearside, County Durham and Teesside and aim to deliver annual savings of £27m.

NHS North East said it hoped to avoid significant compulsory job losses.

Union leaders expressed concern at the planned cuts, arguing managers carried out "important NHS functions".

David Stout, executive director of finance and communications at NHS North East, said: "Like all public sector organisations, the NHS in the region must deliver substantial savings in order to meet the challenges of a difficult economic environment.

"The management cost reductions we have outlined will inevitably impact on many people and we are of course committed to keeping staff fully informed throughout this difficult process.

"The savings made will be reinvested directly in front-line NHS services so that we can meet the future challenges of coping with an ageing population, the introduction of new treatments and technologies and increasing our focus on prevention."

The proposed savings are due to take effect from April 2011.

Trevor Johnston, Unison lead officer for health in the North East, said: "The trade unions are happy at any improvement to front-line services for patients, but must point out that managers and administrative staff carry out important functions in the NHS.

"We're very concerned that a reduction in these areas will lead to front-line staff being unable to function effectively due to lack of administrative and managerial back up.

"We are also concerned with governance issues due to these cuts in staff.

"The trade unions understand that these measures are imposed by the government and we are actively engaged in consulting with the employers on the changes."