Recommendations that Ludlow Health Facility project should be abandoned will go before members of the Shropshire Community Health NHS Trust board when it meets at Ludlow Racecourse.
Board members will be asked to invest £160,000 into Ludlow's community hospital to keep it running, but campaigners say questions need to be asked about why the scheme was facing the axe.
Peter Corfield, chairman of the League of Friends of Ludlow Hospital, claimed the scheme had been dogged by "incompetence at a senior level".
And Ludlow MP Philip Dunne said he would be asking "some very challenging questions about how the project got into the state it is in".
Julia Bridgewater, interim chief executive of Shropshire Community Health NHS Trust, admitted that if the recommendations were approved, a lot of people could be left hurt.
She said: "This is a regrettable position and the recommendation to our board not to proceed with the Ludlow Health Facility may cause upset and disappointment to many people.
"But I believe it would be irresponsible to continue with the project at the risk of exponential financial difficulties which could affect other frontline services.
"According to the recommendations, the existing hospital and current services would continue. There are a number of additions and improvements which can be introduced into the current hospital with positive benefits for local patients."
But Mr Corfield today reacted angrily to the news. He said: "From 2009 onwards there was written evidence from the Primary Care Trust and Shropshire Community Health Trust of a direct funding shortage, but each time it was said an increase in income had been identified and agreed. Those statements have been made over and over again, and really have misled all sorts of people.
"The scope and size of the project had never been properly checked out.
"There has been such incompetence at a senior level.
"This should have been challenged many times but it never was.
"But we have to look forward and keep as many local services as we can.
"Hopefully we'll get a visionary leader who can get the best possible services for local people."
Mr Dunne added: "I will be attending the meeting to speak and will be asking some very challenging questions about how the project got into the state it is in.
"I also look forward to the future and the review of services in Shropshire. I hope we come out of the that review with a clear and affordable plan for the people of south Shropshire."
The future of the scheme will be discussed at a public meeting at Ludlow Racecourse tomorrow morning.
The project, which would also have seen the transfer of the town's two GPs' surgeries to the new site, was thrown into doubt after Shropshire Clinical Commissioning Group refused a request to bail out the project by making good a £1.1 million annual shortfall for the next 25 years.
That funding gap was due to a difference in opinion over the amount of people who would actually be using the new site.
Trust bosses looked at renting out space and redesigning some aspects of the building to reduce costs. They even looked at substantially reducing the size of the building or moving some services in from other community hospitals.
A report presented to tomorrow's meeting says that in light of the "outstanding financial gap" it is recommended that the new facility is "not approved to proceed".
Instead, members will be asked to pump an immediate £160,000 into Ludlow's community hospital to keep it up to standard for the next two to five years.
The report also recommends setting up a task force to develop services in all community hospitals, and suggests using Ludlow as a "test-bed" for initiatives.