Birmingham's new superhospital could be scuppered if Government concerns over the viability of new projects funded by public-private agreements lead to the plans having to be scaled down.
University Hospital Birmingham NHS Foundation Trust is expecting a decision from the Treasury over the future of the Private Finance Initiative scheme within the next two weeks.
The trust's chief executive Mark Britnell told The Birmingham Post last night he was still confident the £559 million project would be given the go ahead.
But construction cannot start on the Queen Elizabeth Hospital site in Edgbaston until the contract with private partners Consort, which was originally due to be signed last March, is finally agreed.
Doubts were cast over UHB's plans after Health Secretary Patricia Hewitt ordered a review of proposals for a £1.2 billion rebuild of the Royal London Hospital in Whitechapel, and part of St Bartholomew's in Smithfield, London.
Mr Britnell said scaling down the scheme could add a six-month delay and up to £49 million to its costs - putting it "on the cusp of affordability".
He said: "If the Treasury asks us to make the scheme smaller it would take six months to redesign the existing plans.
"It's not a case of simply 'lopping off' ten or 20 per cent of the building, we would have to change the whole design and that could cost between £40 million and £49 million. That would put the whole scheme on the cusp of affordability.
"If they asked us to do that we would not be able to give the £40 million to Consort - made up of Balfour Beatty, Royal Bank of Scotland and HSBC. It would have to be added to the PFI total - which would mean an extra £3 million a year over the repayment period.
"It's too late for that now, we're past the point of no return. Effectively that would be telling us to stop the scheme.
"But I don't think that's what our Ministers and Prime Minister want to happen here."
Mr Britnell remains optimistic that the deal will go ahead and said the country's best medical staff were being drawn to UHB by the promise of a "truly world-class hospital".
He added the proposed superhospital was a major factor in the Ministry of Defence's decision in 2000 to base the Royal Centre for Defence Medicine in Birmingham.
UHB was among the first foundation trusts to pursue PFI, but residents in a Birmingham suburb caused costly delays as they protested against plans for a community mental health unit and to extend Moseley Hall Hospital.
Mr Britnell said: "The real problem has been that millions has been wasted and time lost as a result of residents in a certain street in Moseley who opposed our plans for a community mental health unit and Moseley Hall.
"We only got planning permission for the extension to Moseley Hall last month, which is the real reason why we can only talk about financial closure now.
"We're hoping to achieve financial closure and sign the contract within the next two weeks, but that will depend on the Treasury making an announcement about the PFI timetable.
"Balfour Beatty are asking for another £6 million for February, and if we do not reach agreement by mid-February we could be facing further capital costs of £40 million."