NHSU, the health service's corporate university, has cancelled a major elearning procurement project, according to a leaked internal memo seen by Computing.

The organisation, which aims to develop the skills of the 1.2m people working in the health sector, hoped to award a contract this summer for the Virtual Campus, an online platform to provide NHS staff with 24-hour access to knowledge and learning resources.

IBM and LogicaCMG are believed to have been shortlisted for the project.

But executives at NHSU decided to terminate the original Virtual Campus initiative in favour of purchasing a learner management system (LMS) to 'support the management, support and tracking' of students.

NHSU launched an interim registration system earlier this year to allow students to sign-up to courses, as part of plans to support 100,000 learners in the 2004/5 financial year. The LMS is urgently required to complement this system.

'We will therefore be proceeding with the Virtual Campus on this basis,' says the internal memo.

An NHSU spokeswoman says the organisation remains committed to the establishment of a Virtual Campus, but has changed its approach from the early plans.

'The LMS is such a vital part of the Virtual Campus that it would have constituted a major variation to the procurement to have expected the suppliers to accommodate an already operational LMS,' she said.

Elearning expert and director of the LearningLab Steve Molyneux said: 'Once again, it looks like a case of a project being driven by technology, rather than the needs of the people.'

Computing has also learned that a review was commissioned to consider whether the failure of the government's flagship online learning scheme, UKeU, carried any significant lessons for NHSU.

The review found that UKeU was 'fundamentally different' in structure to NHSU, but recommended production of a roadmap for internal and external users to understand the services available through the Virtual Campus.

'It would have been imprudent of NHSU not to take stock of the UKeU experience that possibly could help inform our strategic or operational decisions,' said the NHSU spokeswoman.