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The South London Healthcare NHS trust, which went into administration after running up debts of £150million, should be dissolved with the possibility that one of its hospitals will be run by a private company, its administrator said today.

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In addition, the accident and emergency (A&E) department at Lewisham Hospital nearby will be closed as part of the plans for the trust, which was losing more than £1 million a week, and the wider area.

Special administrator Matthew Kershaw said the A&E department, not part of the South London trust, will be downgraded to an “urgent care” unit and Princess Royal University Hospital in Farnborough, near Bromley, should be taken over by another provider.

Outlining his draft recommendations, Mr Kershaw said it would be preferable for the Princess Royal to be run by King’s College Hospital NHS Foundation Trust, but that an alternative option would be to run a procurement process allowing private companies or other NHS providers to bid to run services at the site.

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