Staff on the ward will be redeployed to other areas of the trust
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The in-patient ward at Hornsea Cottage Hospital is to close for at least six months with the loss of 12 beds.
From 1 October, patients will be cared for in their own homes or another local community hospital, the Yorkshire Wolds and Coast Primary Care Trust said.
It said the closure, which will be reviewed in March, was necessary as low staff levels were endangering patients.
But campaigners who thought they had won their battle against further cuts at the community hospital are furious.
Earlier in the year, health officials dropped plans to shut Hornsea's minor injuries unit after a widespread public consultation, although half of the beds on the in-patient ward were closed.
Financial pressures
From 1 October, staff on the ward will be redeployed to other areas of the trust.
Acting Chief Executive Claire Wood said the temporary closure of the ward was a hard, but necessary, decision.
"It has become clear that the current staffing levels within the intermediate care service and the community hospitals are increasing the risks to patients and staff," she said.
"In addition, the financial pressures of recruiting agency staff to cover sickness and holiday periods are too great in our current financial position.
"We therefore have to make some difficult decisions to protect the patients we care for and ensure they are not put at risk."
'Dreadful decision'
But campaigners said the trust had promised to maintain services at the hospital and accused them of trying to sneak the cuts through on safety grounds.
Hornsea Town Councillor Polly Worsdale said the decision flew in the face of democracy.
"There has been massive consultation, and no-one wants to lose our hospital," she said. "The views of the people have been ignored."
MP for Beverley and Holderness Graham Stuart said he was working with campaigners to try to reverse the trust's "dreadful decision".
"I'm horrified that the PCT should consider closing this vital facility, he said.
"We believed that we had won the battle to keep the hospital beds open but now local patients will be shipped off to Driffield, Hull and Withernsea.
"I have campaigned to save Hornsea Hospital from long before I was elected as an MP and cannot stand by while this so-called temporary measure is implemented."