Frontline services at North Middlesex Hospital are under threat as part of vigorous plans to make cuts of £15million.
Up to 50 jobs will be slashed at the Edmonton hospital, an operating theatre is to close, and plans are in the pipeline to cut back on expensive drugs and medical tests in a bid to save money.
The North Central London Strategic Health Authority ordered the appointment of financial troubleshooter Ernst and Young to identify the savings after the North Middlesex University Hospital NHS Trust failed to manage its budget.
At the end of the current financial year it was £8.4million in the red.
The trust has also appointed its own in-house team to tackle the problem.
Every avenue of cost-cutting is to be explored. Savings have been identified in the hospital restaurant, where prices are set to rise, and restrictions are to be placed on free car parking for visitors.
Even the stationary cupboards are to come under scrutiny, as bosses shop around for the cheapest suppliers of pens and paperclips.
Trust chief executive Clare Panniker said securing its financial position was vital to ensure the hospital's ambitious £74million rebuild could take place.
"The reality is the Strategic Health Authority won't authorise our rebuild until we have balanced our financial position.
"Over the past year, we have been trying to put our house in order and basic systems have been implemented.
"This has provided some benefit, but we need to do more and work harder and faster to prevent our financial position deteriorating even further."
Ms Panniker said the trust remained committed to patient care and targets.
She said: "We have, in the last six months, re-invested some of our savings to help kick-start initiatives, which include expanding our medical unit to prevent unnecessary admissions to hospital and getting people home quicker.
"We have also opened a short-stay and day unit, and launched a first-response team to prevent unnecessary admission through the accident and emergency department, and improve discharge."
Changes will come into force from next month, while job losses will be officially announced in June.
Ms Panniker said: "There is no doubt when we make changes it will have an impact on staff, but while we have a financial problem, we are not able to move forward."
Edmonton MP Andy Love said hospitals across the UK were being forced to take more responsibility for their financial position.
He said: "I understand the rationale to make savings. All hospitals need to run efficiently and are being forced to look at their costing structures."
But he warned: "Ms Panniker believes the trust can implement these savings without an adverse impact on patient care, and I will be looking critically at that.
"I welcome a response from patients and families who visit the hospital over the next few months to determine whether the trust is living up to its commitments."
Meanwhile nursing union the Royal College of Nursing (RCN) has this week launched a petition asking nurses and the general public to support its opposition to job and patient service cuts because of NHS deficits.
RCN general secretary Beverly Malone will hand the petition to Prime Minister Tony Blair on May 11 the same day the RCN will hold a national rally in Westminster to put pressure on the Government to safeguard patient services and losses.
Ms Malone said: "We have been challenging the Government on deficits since early last year, but it is in denial about the scale and the impact of deficit-driven cuts, and the results are there for all to see patients are suffering and nurses are losing their jobs.
"Losing nurses will affect patient care, pure and simple. The Government has to give trusts more time and flexibility to balance their books so that this scorched earth policy of cutting patient services and jobs is stopped."