However, the trust said it was "shameful" DHB chief executive Brian Rousseau attacked trustees who lobbied for the best health interests of the community, while ASMS said Mr Rousseau was "lashing out like a possum caught in the headlights".
In a statement last night, Mr Rousseau said it was "disappointing such comments prey on the fears of local people by suggesting firstly that Queenstown will not have a hospital and secondly that if it does it will be privatised".
"I wish to reassure the Wakatipu public that both these claims are untrue and completely irresponsible."
Mr Rousseau said the DHB was not proposing to do away with hospital services, nor privatise them. The board wanted to make them more efficient and more convenient for the public.
The proposal would allow the public to have access to a wide range of services in an integrated family health centre (IFHC) which could be developed on the Lakes District Hospital site, Remarkables Park or any other suitable site, he said.
Hospital staff and their union representatives had until March 18 to give feedback on the IFHC recommendation.
"This is a normal legal requirement, which the executive director of ASMS understands as he is party to it.
To have him publicly fuel alarm within the community with his false and inflammatory statement of hospital privatisation is completely unprofessional," he said.
"Likewise for the Wakatipu Health Trust with its self-appointed trustees to mislead the public by misrepresenting the facts calls into question whether they truly have the best interests of the community at heart, or whether they have their own secret agenda."
Mr Powell said what the DHB was proposing was "contracting out", a form of privatisation Mr Rousseau seemed to refuse to acknowledge.
Wakatipu Health Trust chief executive Maria Cole, of Queenstown, said yesterday the proposed IFHC was not a hospital.
Trustees wanted to see increased services, upgraded facilities, greater use of technology and community governance over Lakes District Hospital like other regional centres.
"We defy Mr Rousseau to guarantee that these additional services purportedly to be provided in his IFHC will be provided free of charge to our community as they are to other New Zealanders elsewhere.
"It is shameful of Mr Rousseau to attack the unrecompensed trustees of the Wakatipu Health Trust, which has always said publicly that it has no agenda or aspirations for itself. It simply advocates in the best interests for the community in the face of the DHB and private interests apparently in pursuit of mainly financial and commercial objectives."
