Fears that the Royal Free Hospital could be involved in an “asset stripping” exercise after it takes over Chase Farm Hospital have grown, after plans to build “hundreds of homes” at the neighbouring hospital were revealed.

The proposals emerged at a health scrutiny meeting at Camden Town Hall last Friday and come after long-standing concerns about the Royal Free’s planned takeover of the Barnet and Chase Farm Hospitals Trust.

Councillors scrutinising the bid expressed fears that the planning application would see Enfield patients lose out and the Royal Free pocketing the profits.

The proposed takeover comes after Barnet and Chase Farm revealed in 2012 it would not be able to meet the government’s deadline to become a foundation trust.

Cllr Alev Cazimoglu, from Enfield Council, said: “The Royal Free is preparing to submit a planning application to Enfield Council to build several hundred homes on the Chase Farm Hospital site.

“There is no transparency. No residents have been consulted. We’re very anxious.

“Our worst fears are going to be realised – we don’t know what the proposals involve; we don’t know how much land is going; and we don’t know what will go back to Chase Farm.”

A spokesman for the Royal Free said: “All the proceeds of any land sales at Chase Farm would be used to fund local health services for Enfield residents.”

But Cllr John Bryant, chair of Camden’s health scrutiny committee, said there needed to be “more precise detail on where the money would be spent”.

Councillors called for concrete assurances from the Royal Free’s chief executive David Sloman that any revenue would be “reinvested back into the hospital”.

The issue is likely to raise concerns across the NHS among the boards of hospitals still seeking foundation trust status – like the Whittington Hospital in Archway – which face an uncertain future and could themselves be taken over.