The Bermuda Hospitals Board and Horizons & Cottages are in talks to lease the hotel property out for nurses' accommodation.

The Paget property, owned along with the Coral Beach Club by Brickman Associates in the US, has 45 hotel rooms.

Last night hotel employees were unable to say what the future was although one staff member confirmed the property is to be leased out for hospital accommodation.

A spokeswoman from the BHB said nothing had been signed yet.

She added: "The BHB originally contacted all hotels through the Bermuda Hotel Association to discuss requirements as we start to redevelop the King Edward VII Memorial Hospital site. We are looking for about 80 rooms for our overseas staff to rent.

"Out of this approach, one of the discussions currently underway has been with Horizons & Cottages regarding rental nursing accommodation.

"This is due to Bermuda Hospitals Board's decision to restore the Queen Elizabeth Nursing Residence (QENR) into accommodation only, in order to meet its staff needs. The required upgrades mean the QENR building will be temporarily evacuated."

She continued: "Nurses will move back once the upgrades are complete.

"Bermuda Hospitals Board has been pleased with the response by the hotel and business community as we plan to move into this phase of transition. However, no contractual agreements have been finalised at this time."

Earlier in the month the BHB confirmed that it had taken over 24 rooms at the Grape Bay Beach Hotel for nurses' accommodation.

If the BHB does lease out Horizons as well, it will bring the total number of hotel rooms on the Island leased to the hospital to 69. An additional 11 would be required to meet their stated needs.