The understands that a number of first-time buyers had put in offers for the eight units on Ord Road, Paget, and had even handed over deposits to the developer.

But before any papers could be signed, hospital chiefs spotted the property and offered the developer extra cash for all eight units.

Although the deal is still to be finalised, it is understood BHB was willing to pay in the region of ten per cent above the original asking price for the units ? forking out about $6 million for the entire property. The Board is struggling to find suitable accommodation for medical staff hired from overseas.

One buyer, who asked not to be named, said: "I put in an offer through a real estate agent and the developer verbally accepted it. I then got the money together to pay the deposit and paid that to the agent. But after a while I was wondering why things were taking so long and that was when I was told that the developer had accepted a better offer from the hospital. I hadn't actually signed a contract but three or four other people had put in offers which, like mine, had been verbally accepted.

"I did eventually speak to the developer but he was very unapologetic. He basically just said that he had had a better offer."

It is understood that the move also angered house owners who had previously agreed with the Board to rent out their homes to hospital staff. BHB had made arrangements with several landlords to rent out accommodations, but pulled the rug on the deal once it had secured the Ord Road property.

Last night a hospital spokeswoman refused to comment on the controversial purchase or whether the hospital was facing its own housing crisis.

But BHB acting CEO Venetta Symonds said: "As the second largest employer on the island, Bermuda Hospitals Board has a workforce of approximately 1,400 staff.

"We face the same employee-related challenges as other employers, including those pertaining to housing. BHB has publicly requested that landlords contact us to assist with our housing needs on both a rental and purchase basis.

"We regularly pursue opportunities as they arise. Through an aggressive recruitment effort, BHB has reduced its nurse vacancy levels by approximately 50 per cent."

Yesterday, Shadow Health Minister Louise Jackson condemned the buy-out, saying it should not have been necessary had Government maintained purpose-built staff accommodation.

And she also questioned where cash for the multi-million-dollar purchase had come from, noting that nothing had been set aside in this year's Budget.

"The taxpayers of this country should view with alarm the purchase of a building costing around $6 million to house doctors and nurses," she said.

"I fully sympathise with the need to find accommodation for nurses and doctors and I understand that there is an urgent need, but is this the best answer? I don't think so. With the best will in the world this $6 million property is only going to house a small number of staff.

"My real concern is that the nurses' quarters seem to have deteriorated in the last six years, Hospitals around the world are able to remodel and renovate their facilities but this is not the case with our hospital or the auxiliary buildings such as the nurses' quarters.

"What has happened to the Estate Master Plan? Not one penny has been allotted from this year's Budget which means it has been delayed for another year, and then out of the blue you have the BHB spending $6 million on property.

"We get dead silence from the Minister of Health and as an MP and a taxpayer that's worrying to me. We really do need a heads-up on this as we seem to be lurching from one project to the next without any sound reasoning."