HEALTH Minister Michael Ferguson has vowed to rescue the Royal Hobart Hospital, labelling the findings he took to cabinet "scandalous".
The government has suspended work on what has been described by Mr Ferguson as a $586 million "mythological" project.
Mr Ferguson briefed cabinet on the issues surrounding the redevelopment on Monday, declaring the project an "explosive disaster" caused by the former government.
"I outlined matters related to significant delays, management issues, patient risk and potentially significant budget blowouts," Mr Ferguson said.
He said if the project proceeded in its current form it could end up $70 million over budget.
"No responsible government would proceed at the moment," Mr Ferguson said.
He said continuing the project would "expose taxpayers to tens of millions of financial over-run" and risk patient safety.
"We'd be potentially building a hospital we can't even afford to run," he said.
Mr Ferguson couldn't say when work on the project would be back on track, but a version of the redevelopment would be "rescued".
"I'll be bringing advice back to the next cabinet meeting," he said.
He said work due to start last week had work permits withdrawn so the government could make decisions on the project, and did not rule out asking the federal government for further funding.
Labor health spokeswoman Michelle O'Byrne said redeveloping a working hospital came with "significant challenges".
"Michael Ferguson needs to own up to whether he's going to work through those challenges or abandon the full redevelopment," Ms O'Byrne said.
"If he is going to shrink the project, which services are not going to be delivered?"