Campaigners yesterday lost a long-running battle to keep a much-loved community hospital open, with officials announcing beds will be gone by April and the site then sold off.

Campaigners yesterday lost a long-running battle to keep a much-loved community hospital open, with officials announcing beds will be gone by April and the site then sold off.

Hartismere Hospital, in Eye, has served the north Suffolk community for decades but has now been deemed by Suffolk PCT as "not fit for purpose".

Despite an intervention by health secretary Patricia Hewitt last summer, when she called for the PCT to work closely with the local community on the future of services at the site, it was announced yesterday that inpatient care at the hospital will be phased out.

Instead, patients needing one of the 10 beds the hospital currently provides will be placed in the nearby Paddock House residential care home, with the PCT providing NHS nursing care and therapy.

And a new local healthcare team has been set up for Eye, caring for people at home - including nursing, therapy and rehabilitation - which runs from the hospital at the moment and will provide overnight care from April when the remaining nurses transfer.

Out of the 64 health workers employed at Hartismere Hospital last summer, 22 have taken voluntary early retirement or redundancy, 37 have been, or will be, given jobs in the new healthcare team, and the remaining five have been reassigned elsewhere.

There are hopes that when the hospital site is sold off, a partnership of local people and professional healthcare providers will bid for it and then open a new health and social care centre. But a spokesman for Suffolk PCT, which owns the site but is £19m in debt, said it was "too early to say" whether a healthcare consortium would automatically become a preferred bidder - raising the risk that developers could transform the hospital into luxury housing.

Eric Havers, chairman of the Friends of Hartismere Hospital pressure group, said: "We're disappointed that they're seeing fit to take the beds outside the hospital but we have to accept that if it's not clinically safe to have these beds in there then we understand that.

"At least the PCT has recognised the need for some beds in the area and there are one or two encouraging things in their statement, such as the aim to develop the social care.

"There's a risk with any government body that they might change their minds and there are no guarantees, but it's up to us to monitor it all and put pressure on to make sure the development does take place."

Martin Royal, Suffolk PCT director of business development, said: "There is a need to shift resources from old-style institutional care and outdated buildings into better services for patients, such as these excellent local healthcare teams."