Two decrepit Merton hospitals earmarked for redevelopment face losing vital funding, prompting Wimbledon’s MP to call for the chief executive of NHS Sutton and Merton to resign.

Provisional consent had been given to build state-of-the-art health care centres at the Nelson Hospital in Wimbledon and Wilson Hospital in Mitcham – part of a £57m redevelopment of four sites – but last week it emerged the trust was reassessing the viability of both schemes.

MP Stephen Hammond said the news was “a slap in the face for residents”, and called on the primary care trust’s chief executive, Bill Gillespie, to resign.

He said: “This is outrageous. Only recently the trust was briefing the development would proceed. This review is only happening because of the financial incompetence of the trust management – they should not have let the finances go so badly into deficit.

“The chief executive said it now needs to review the sustainability and viability of the local care centres. What is clear is he is neither viable or sustainable and must resign before the review can take place.”

The trust said it needed to make £33m savings this financial year and last year ran a deficit of £2.5m.

Four sites in Sutton and Merton had been earmarked for the new centres, intended to move services out of St Helier Hospital as part of the Better Healthcare Closer to Home scheme.

Development of one centre in Wallington has already begun and will be completed at a cost of £13m. But the two Merton centres and a third next to St Helier Hospital face the axe pending the results of a review, expected within three months.

Each centre was intended to provide GP services, pharmacies, outpatient clinics and community mental health services.

Chairman of the Nelson Hospital community reference group Bob Welchman said: “I haven’t the adjectives to describe how I feel about this – it is quite appalling.

“The whole decision is being made at the highest political level and just isn’t being treated as a local issue. We had every expectation a centre was going to be constructed and it had been approved by the NHS Thames region.”

An NHS Sutton and Merton spokesman said: “While health spending has been ring-fenced by the Government, levels of growth will be considerably lower going forward, and the NHS as a whole needs to make £20bn in efficiency savings over the next four years.

“We are also facing pressures with more people being admitted to hospitals in south-west London. It is therefore only sensible to look at the proposed development of local care centres to see whether it is possible to reduce costs or deliver greater savings in other areas.”