Maldon's hospital should make way for housing if a replacement site is found, say health bosses.
Mid Essex Hospital Services NHS Trust, which owns St Peter's, said Maldon District Council has not made clear that an alternative use for the site needs to be identified if a new hospital location is found elsewhere.
It claimed the council's Local Development Plan is unsound as a result.
The LDP says the council would support a new community hospital and would in principle support any appropriate development to allow it to be built.
However, it does not mention redeveloping St Peter's to help deliver a new hospital.