Unions fear staff cuts could be on the horizon at a cash-strapped Winchester hospital.

Bosses at the Royal Hampshire County Hospital face a deficit of £5m, although this figure may be knocked down to around £3.6m with sales of land taken into account.

Health chiefs are now planning a merger to reduce costs. Management of healthcare providers in Winchester, Eastleigh and Mid Hampshire could be integrated and a report on the move said that, to achieve financial balance, the providers would have to operate with fewer staff.

Doug Smith, joint spokesman for all the unions represented at the RHCH, said staff were still concerned posts would be axed. "We're keeping a close eye on it. This is having a major affect on services, which causes a great deal of concern."

Ross Dunworth, director of finance at the Winchester and Eastleigh NHS Trust board, which runs the hospital, said the deficit was due to keeping costs under control rather than actually cutting them.

To help meet the shortfall, the trust is selling land, which may include The Mount Hospital, Bishopstoke, which controversially closed in September. Earlier in the year, trust chiefs decided to axe 100 posts at the hospital which they said may include redundancies.

A report to the board said the 100 posts identified were mainly included within an original savings plan and wouldn't bridge the recurrent savings gap.

"It is therefore recommended we no longer monitor the achievement of staff posts against the 100 posts, but focus on the overall reduction of staff costs as part of the overall savings plan," the report said.

Mr Smith said there was a great deal to meet financial targets. "Staff are under so much stress. They are under a great deal of pressure at the hospital, with the targets we have to meet all the time."

Bosses went into closed session to discuss an embarrassing pay blunder which has seen five consultants overpaid by a whopping £290,000 because of an error in the payroll department.

The doctors were given discretionary and distinction payments to which they were not entitled dating back several years. The error was only spotted by auditors earlier this year. Health bosses are now in talks with the British Medical Association, representing the doctors, to claw back the cash.