A debt-ridden NHS trust that was on the brink of bankruptcy should be broken up, with the possibility that two of its hospitals could eventually be privately run, its special administrator has recommended.
The closure of an accident and emergency department at a nearby hospital would be a knock-on effect of the plans to dissolve South London NHS Trust, which was losing around £1.3 million a week and was placed into administration this year.
Setting out his draft recommendations for the trust, administrator Matthew Kershaw said University Hospital Lewisham's A&E department - not part of the trust - would be downgraded to an "urgent care" unit and Princess Royal University Hospital in Farnborough, near Bromley, should be taken over by another provider.
Outlining his draft recommendations, Mr Kershaw said it would be preferable for the Princess Royal hospital to be run by King's College Hospital NHS Foundation Trust, but an alternative would be to run a procurement process allowing private companies or other NHS providers to bid to run services at the site.
In addition, parts of Queen Mary's Hospital in Sidcup could be run by a private company after being temporarily taken over by an NHS provider and then put out to a procurement process, the administrator's draft report said.
The trust, whose debts are expected to reach £207 million by next March, could save around £42 million from its staff pay budget. Those savings would include the cutting of 140 medical staff across its three hospitals, according to the report.
Mr Kershaw said: "Clearly, with staffing being a key part of the costs of running a health service, there will be changes to staffing.
"That's happening in every hospital in the country. It needs to happen in south London, just as it does everywhere else."
In addition, the Department of Health (DH) should help bail out the trust's massive PFI debts, which use up 16% of trust income, according to the report.
A 30-day consultation with staff, patients and the public on the draft report will begin on Friday. A final report will be submitted to Health Secretary Jeremy Hunt on January 7.