Fears for the future of the world famous Nuffield Orthopaedic Centre, in Oxford, intensified today.
A timetable setting out how the NOC might be wound up as an independent trust has gone to the board of the South Central Strategic Health Authority.
And the SHA says it is now ready to step up the search for an NHS trust or private organisation interested in taking over the specialist hospital.
A final choice is expected to be made within a year, with the NOC disappearing as an independent trust in April 2010.
Oxford East MP Andrew Smith warned that any "ill-judged merger proposal" would be met with a major campaign to secure the hospital's future.
"It would not only be local but international," he said.
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The speed of progress towards putting the NOC out to tender has shocked staff and former patients, who say the hospital is effectively being put up for sale.
They fear that any takeover will result in services being drastically cut, with ground-breaking treatments scrapped.
With the health authority doubtful about the financial viability of the NOC, a study was commissioned by PricewaterhouseCoopers to assess the financial impact of merger. The report has concluded that benefits will be gained "by integrating the NOC with another provider to mitigate the financial risks faced by the trust".
The authority says it will now seek to identify potential partners, including other trusts and non-NHS organisations.
Mr Smith accused the health authority of being "over-hasty" and ignoring key developments that could transform the NOC's financial position.
He said the Government had promised to re-examine the controversial tariff system, which has left specialist orthopaedic centres underfunded.
He said there was also evidence that the NOC had stabilised its financial position. The chairman of Oxfordshire County Council's health scrutiny committee, Dr Peter Skolar, said: "If the NOC is sold off to the highest bidder, the first thing the bidder will do is get rid of the loss-making services. The SHA is saying this is all being done 'just in case' - but they have already made their minds up."
The NOC's longest-standing patient, Joyce Silvester, 84, is concerned by the threat to its services.
Mrs Silvester said: "The NOC must be allowed to continue practising its undoubted expertise with sufficient funding to cover highly specialised services, which are in demand nationwide and often worldwide."
Sue Woolacott, of the NOC Patient Panel, said the report made no attempt to identify the huge costs of redundancy payments and pension costs if the NOC was taken over.
Ms Woolacott urged the SHA to hold back until the prospect of the NOC joining an Oxford academic health centre had been investigated.
The Government in May backed the idea of creating a new wave of 'academic super trusts'. The ORH Trust and Oxford University have been in detailed talks about creating one.
The chief executive of the NOC, Jan Fowler, said: "Our priority is to ensure that any decisions secure the future delivery of our services, some of which are not routinely provided anywhere else in the country."
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