NHS managers want to join forces with a private healthcare firm to increase services at an Oxford hospital.
Despite building a new two-storey unit at the Nuffield Orthopaedic Centre, the managers say they still need more facilities for patients.
They are discussing ways to work with a private company, which would open a centre nearby and carry out NHS and private treatment on behalf of the NOC.
Private treatment already earns the centre £1.9m a year.
Critics claim the idea is a further move towards privatisation within the NHS.
But NOC chief executive Ed Macalister-Smith said: "We need more capacity and we can't build it ourselves on our own site."
He said any private partner would charge no more than the national NHS rates for treatment. They would also have to have a centre very close to the NOC's Windmill Road site.
Mr Macalister-Smith said no sites for a centre had been earmarked and no firms highlighted as possible partners, including the Nuffield Hospitals Group, which is building a private 83-bed hospital at the Manor Ground site in Headington.
Mark Ladbrooke, of health union Unison, questioned why the NOC was unable to provide more capacity. He said a Government charge for NHS hospitals for their buildings was an incentive not to develop its own site.
Margaret Stanton, honorary secretary of the Oxfordshire Private Finance Initiative Alert Group, said: "This is shocking news and another blow to the NHS, which is moving more and more into privatisation."
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