A NEW Forest cottage hospital is axing all 20 of its beds.

The drastic trial measure is being taken after bosses imposed restrictions on employing bank and agency staff due to a £9.8m cash crisis.

As a result they do not have enough staff to cover the wards at the Forest's five community hospitals.

Staff at the Fenwick Hospital in Lyndhurst were told yesterday that inpatient services will be transferred to hospitals at Hythe, Fording-bridge, Milford and Lymington for three months.

All of Fenwick's other services - which include outpatient clinics and a minor injuries unit - will continue to operate.

Inpatients at Lyndhurst are mainly elderly and have either been referred by GPs and do not need to go into an acute hospital or have just left one.

Occupancy levels at the Fenwick fell dramatically as a result of staff shortages and stood at just 65 per cent in December.

The hospital currently has about six patients and bosses predict three or four will need to be relocated to another hospital. About 30 nursing and support staff will be redeployed to work at the other hospitals.