A hospital in Bristol could be facing part-closure having already shut an 18-bed elderly care ward.
The recent closure of the Devon ward at Blackberry Hill Hospital is now under review, having been condemned by Bristol City Council.
But South Gloucestershire Council has since raised fears that more of the hospital could close as part of a cost-cutting drive.
The hospital is mainly run by North Bristol NHS Trust (NBT), which revealed a £44.3m deficit at two of its hospitals earlier this year.
A spokesman for the trust said nothing was as yet decided.
But a report complied by the hospital's 'Project Board' and seen by BBC News Online says: "The board was set up... to develop options to vacate NHT services... from the Blackberry Hill site... to improve services whilst maximising revenue savings to a target to at least £1m... and to facilitate site disposal.
"The... sub-group was responsible for developing proposals to reprovide other services currently based at Blackberry Hill and to develop a plan to maximise the value of site disposal."
In a statement, Sonia Mills, chief executive of the trust said: "Work to develop the future of services at the hospital is ongoing.
"Between now and spring we will be seeking views from staff, patients and the public, and input from voluntary and community organisations.
'New services'
"Only after we have taken account of this feedback will we finalise our proposals for formal consultation.
"This consultation will probably take place next summer and will last for three months. Service changes would only start to take place following this."
Blackberry Hill has 148 beds for care of the elderly, and 172 beds for the Avon and Wiltshire Mental Health Partnership NHS Trust, which are not believed to be affected.
Dr Martin Morse, medical director at the NBT added "There are a large number of patients at Blackberry Hill who we believe could be cared for more appropriately by community-based services or at home.
"We are working with primary care trusts and social service departments to develop proposals for new services which will better meet the needs of individual patients.
"This will mean the transfer of resources to primary care trusts and social services departments."