Liquidators for the King Edward VII Hospital in Midhurst, which is run as a charity, had set a deadline of noon on Friday for a buyer to be found.

But staff have been told the hospital will not close immediately and potential bidders will be given more time to prepare a package.

The NHS has also stepped in to offer more work to keep the hospital operating.

Money problems

Supporters trying to save the hospital travelled to Westminster last week to demonstrate against the closure, which would mean 400 job losses.

They handed a 50,000-name petition into 10 Downing Street calling for the hospital to be preserved.

The hospital, which treats about 1,200 patients a year, appointed a liquidator after running into serious money problems.

Isle of Wight MP Andrew Turner, who went with protesters to London, said last week that closure of the hospital would have a massive effect on cancer, cardiac and orthopaedic treatment across the south of England.

Patients would have to travel as far as Tooting and Oxford for cardiac treatment, he said.