Cardigan Hospital has 25 beds and provides a range of services

Plaid Cymru Ceredigion AM Elin Jones said the county's NHS trust could close Tregaron Hospital and reduce services at Cardigan Hospital.

She claimed that Ceredigion NHS Trust faces a financial shortfall of just over �1m in the coming year.

Ceredigion NHS Trust and the local health board said they were considering various options of saving money.

'Essential components'

Earlier this year, the Welsh Assembly Government announced it would fund a new �7m building at Tregaron and �9m for a new facility at Cardigan.

According to Ms Jones, those projects could now be in jeopardy.

She added: "Both hospitals are essential components of the NHS in this area and I have no doubt that, like me, everybody will be aghast at such drastic actions by the NHS.

"There are no clinical reasons for these closures. It is purely a case of not enough money.

Tregaron Hospital has 29 inpatient beds

"The fact that both Cardigan and Tregaron are so clearly integral to health and social care in Ceredigion has been demonstrated by the assembly's commitment earlier on this year to provide �9m and �7m respectively to build new hospitals over the next few years at both locations.

"What kind of NHS do we have that is able to allocate significant money towards the bricks and mortar of new hospital buildings, but cannot find the funding to keep the hospitals running long enough for the new buildings to be ready?"

'Valuable service'

Ceredigion Council leader Dai Lloyd Evans said: "It's a shock. They are only rumours and nothing has been said publicly.

"It's a great pity as rumours can be very harmful and raise doubts.

"I think it will shock a lot of people, workers and patients mostly, but none of the residents of Ceredigion want to lose such a valuable service."

Ceredigion NHS Trust and Ceredigion Local Health Board said that they were looking closely at a number of options how to save money and they expect to discuss the situation further in a meeting in a few weeks time.

Tregaron Hospital, which has 29 inpatient beds, provides nursing, rehabilitation, recuperation and palliative care and a range of community nursing services.