A new hospital would merge GP, homecare and ambulance services

The team of external advisors say this could solve North Devon District Hospital's �7.9m debt.

The hospital, built in 1978, is too big for the area, too expensive to run and should be replaced by a smaller hospital, say the experts.

It could mean up to one in five emergencies and one in 10 routine cases being treated outside north Devon.

Andy Black of Durrow Consultants, said a new hospital would merge GP, homecare and ambulance services.

"You must have locally a top-line international standard emergency assessment centre," he said.

It is certainly not in the best interests of patients Jonno Broad

"That is not to say that you must treat everyone you assess with a problem, but you must be able to be assessed locally and you must be able to get a quick, accurate clinical judgement when you have an emergency problem."

Jonno Broad of the Patient and Public Improvement Forum, said: "It is certainly not in the best interests of patients.

"My personal target would be no more than 10% of the population of Devon going out of the area for treatment.

"The people will not support any idea that takes more of them away."

Managers at the hospital welcomed the plans for a new unit in a more accessible location, possibly at Seven Brethren, but it will not be built until at least 2010.

A further announcement on how the hospital will deal with its immediate debt is expected in the next few weeks.

Interim chief executive Brian Aird said: "In the short term there are some very big challenges and there's a huge debt to manage, so we are working through our plans for dealing with that."