Dr Chambers believes the officials planning for the new clinical services building want it to be as small as possible.
His comments come as the Ministry of Health confirmed yesterday the formation of the high-level partnership group of Treasury and other officials that will guide the formal stages of the planning work has been delayed again.
Dr Chambers said it was hoped that by pushing services to the community, hospital facilities in Dunedin could be pared back.
''They're in cloud cuckoo land. Do people really believe this nonsense?''
The hopes for how care would be configured were ''theoretical rather than actual'', he said.
''They do some calculations on a bit of paper and work out they can cut hundreds of beds.
''All this supposed angst about the delay is all because of possible change in functions and change in ways of working.
''That's the sort of nonsense that's going on.''
The Government has been pushing back the project - a business case will not be put before Cabinet until next year - while officials talk of needing to plan for future health needs and consider ''models of care''.
Dr Chambers, who is also a specialist in the emergency department, said hospital planning was notoriously difficult and was easily botched.
''You end up with a brand-new hospital and an executive [in a report] in the newspaper telling people not to go to it because it's full.''
Asked why the estimated cost had increased recently to $300 million if the plans were being scaled down, he said: ''I think the cost never was $200 million. I think it always was $300 million plus''.
Dr Chambers, who was sacked along with other board members just over a month ago, said he would stand for election to the board when democracy was restored next year.
He said the partnership group would control the rebuild, meaning the main project planning would be carried out in Wellington, not Dunedin.
National Health Board DHB performance acting director John Hazeldine said the partnership group was still in the ''final stages'' of formation.
Originally, the group was to have been confirmed in April.
Asked about the delay, a spokesman said the NHB had ''nothing to add to [the] earlier response''.
Six weeks ago, the ODT was told by Health Minister Dr Jonathan Coleman's office the group was in the ''final stages'' of being formed.
The ODT made its initial request yesterday to Dr Coleman, but it was transferred to the ministry.
Dunedin North MP Dr David Clark said he believed the Government was stalling to ensure the big-ticket project became the responsibility of a different administration.
Dr Clark wants an assurance from the Government it is willing to build a high-level tertiary-care hospital in Dunedin.
He said the Government had been refusing his information requests about the project under the Official Information Act.
Health board chief executive Carole Heatly did not directly respond to Dr Chambers' concerns when asked for comment.
''We are building a team to develop the business case for the rebuild of Dunedin Hospital and we will develop a concept that best meets the community's needs in line with our strategic plan,'' Ms Heatly said in a statement.
''As part of this process, we will engage widely with our clinicians and the community.''
