Mount Carmel Hospital could re-open as an overflow facility following a surprise move from health service bosses.

According to the Irish Independent, the Health Service Executive (HSE) is understood to have made a credible bid for the facility in Churchtown, south Dublin after it went on the market for €12 million.

It is believed the HSE wants to use it as a step down facility for patients who are almost ready to return home.

The private hospital, which specialised in maternity services and non-emergency elective surgery, closed on Friday January 31st with debts of around €39 million.

The High Court heard the hospital had been in financial trouble since 2007, and has been dependent on the financial support of NAMA in recent years.

NAMA said it was no longer in a position to continue that support and the company and was completely insolvent without sufficient funds to meet its overheads.

The Minister for Health James Reilly defended the decision to allow the hospital to close, saying that "This is a NAMA decision to close what they see as a money loss-making entity that they weren't prepared to support anymore" and that had the hospital continued to trade, it would have been guilty of "reckless trading".

He added that the Department of Health and the HSE had previously undertaken an appraisal of the hospital - and found that it was not in the best interests of the health services to acquire it.