Hospital bosses have apologised to a mother who lost her baby after midwives misread vital scans showing the child was in distress.
An inquest at Oldham Magistrates` Court on Wednesday heard Olivia was delivered by forceps with her umbilical cord wrapped around her neck.
Coroner Simon Nelson recorded a narrative verdict that the child died of perinatal asphyxia during labour.
Tracy Last and her husband John were desperate to have children and had undergone three years of IVF treatment before Mrs Last became pregnant. She went into labour with her daughter Olivia in the early hours of the October 19 2007 and was admitted to the Royal Oldham Hospital.
Mrs Last underwent standard checks but unbeknown to the couple, a midwife misread a trace used to monitor the baby's heart rate during labour. Crucially the midwife misinterpreted the reading as being "reassuring" when it was "non-reassuring" on repeated occasions and the findings were not acted upon.
The error was compounded by the doctor on duty failing to spot the problems revealed by the trace when he checked at 3.25pm, just an hour before baby Olivia was born lifeless at 4.30pm, the day after Mrs Last was admitted.
Mr Last said: "Nothing can compensate us for the loss of Olivia who we longed for. Tracy and I do though feel that we owe it to the daughter we lost and to other couples, to take action which we hope will lead to lessons being learnt."
The couple, from Chadderton, near Oldham, Greater Manchester, are now taking legal action against Pennine Acute NHS Trust which runs the hospital, in a claim for medical negligence.
Their solicitor, Jenny Urwin, a specialist in clinical negligence cases at Manchester law firm, Pannone, said: "This is a desperately sad case where it would appear that had the midwife interpreted the trace correctly, Tracy would have had a Caesarean section sooner and Olivia's tragic death would probably have been avoided. We will be proceeding with a claim for clinical negligence against The Pennine Acute NHS Trust on behalf of John and Tracy."
Cathy Trinick, head of midwifery at the Trust, said: "The Trust accepts the coroner's findings that some of the care afforded to Mrs Last during the late morning and early afternoon of October 20 2007 fell below the standard expected by our patients and their families. A number of steps have already been taken and changes made to our procedures to ensure, where possible, such incidents are prevented from happening again."