Cr Carmen Houlahan said a letter from Te Whatu Ora Health New Zealand (HNZ) to Dunedin Mayor Jules Radich did not deal with problems raised.
Cost increases should have been planned for and the city would not accept further cuts to the proposed buildings, she said.
Cr David Benson-Pope said the council’s concerns had not been allayed.
Cr Andrew Whiley said he could sense the ambience of the hospital for staff, patients and their families being greatly affected by the Government’s cuts.
"It’s like everything is being shrunk to meet the tight budget, which is still unrealistic," Cr Whiley said.
"When will the media and public see the new design imagery of what is being removed?"
That prompted the council to approve a campaign challenging the Government to rule out reducing the long-term capacity of the hospital and any compromise to clinical services.
Mr Radich wrote to HNZ, requesting more information about the impact of cuts.
HNZ hospital and specialist services regional director Daniel Pallister-Coward replied the additional $110 million granted by the Government for the new hospital "means that we can continue and complete the project without substantial delays".
"Some changes, which incorporate design flexibility to increase capacity in the future, have been made," Mr Pallister-Coward said.
"However, these modifications do not impact on the core objectives of the build, which is to provide the southern region with a fit-for-purpose, state-of-the-art facility that supports the needs of the community now and in the future."
The focus was on preserving "as much clinical capacity as possible, thereby not impacting the delivery of health services".
Removing a staff-focused pavilion building and a public link bridge between the inpatient and outpatient buildings was a substantial part of the cost-saving to the project.
It had been intended the pavilion building would provide a collaborative work space and amenities such as a staff cafe, bike storage and changing facilities.
"Collaborative work spaces and staff amenities will now be incorporated into the inpatient building and across the facility," Mr Pallister-Coward said.
"Non-clinical work spaces will be distributed throughout the facility to enable staff to access work space near their clinical area."
Moves such as not immediately providing 12 beds and "incorporating the logistics functions of the Bow Lane site into the inpatient building site" were "carefully considered on the needs of the population requirements through to 2043".
Alluding to a scathing assessment from HNZ Southern about cuts earlier proposed, Mr Pallister-Coward said the project team had continued to revise the design since September last year.
Key clinical risks "have been mitigated to a point that they are no longer considered critical".
Mr Pallister-Coward argued the standard of care a community received "does not rest solely on the infrastructure it operates within or the floor plan it rests within".
Mr Radich described the letter as revealing nothing new.
Cr Steve Walker said, reading between the lines, HNZ was aware cutting the pavilion building was a decision carrying consequences for staff and patients.
"Any cuts that impinge on staff spaces, and by extension staff working conditions, is a false economy that likely has ‘down the line’ consequences for both staff and patient wellbeing," Cr Walker said.
"That’s just crazy, and to be quite frank, not acceptable in 2023 New Zealand."
Cr Whiley said losing one of the air-bridges would impede the flow of people moving within the hospital.
A design for the hospital had been committed to, but "where is the follow-through?".
"Dunedin needs the Government, whichever party is in power, to build the hospital that was signed off."
Mr Radich said a meeting with new Minister of Health Dr Ayesha Verrall this week was constructive and she listened attentively, but the campaign would go on.
"We won’t stop until we have an assurance from the Government it will deliver what it promised."
