The trust that runs Grantham Hospital has denied that any false information was used to close down a nursery in its grounds.
Acorn Nursery closed a few months ago when nobody came forward to take up the lease.
Lincolnshire County Council chairman Ray Wootten asked a board meeting of the United Lincolnshire Hospitals NHS Trust on Tuesday to answer allegations that it was “not truthful” to staff about the nursery and was going to spend £60,000 refurbishing the building for its own needs.
Kevin Turner, deputy chief executive of the hospitals trust, said the building housing the nursery would need £60,000 to refurbish it, money which the trust did not have available.
Mr Turner said: “There was no intention to close that facility on the back of false information.”
He said hospital staff had been transferred to the building following a boiler house fire in August. He also said the trust worked closely with interested parties but in the end nobody wanted to take up the nursery lease.