The announcement that accident and emergency and maternity services are to be downgraded at Lewisham Hospital has sparked a fresh round of debate of the future of the NHS.

The downgrading of services at Lewisham Hospital in south-east London are among a group of actions taken since the financial unravelling of the nearby South London Healthcare Trust.

Health secretary Jeremy Hunt told parliament that he had rebuffed plans to shut the A&E unit at Lewisham, the site of a major march this past weekend by thousands of people campaigning to maintain the service.

The government’s “mismanagement” of the NHS had worsened, said shadow health secretary Andy Burnham, who warned that the latest decision to reduce services would be a “dangerous precedent” for other hospitals.

The national officer of the GMB union, Rehana Azam, said: “This government is now presiding over the downfall, break up and privatisation of the NHS.

“As people will have to travel further to access services, particularly urgent care in built up areas with congested roads, lives will be put at risk.”

Geoff Martin, the chairman of the campaign group London Health Emergency, said: “The government have today endorsed brutal cuts to front line hospital services in south London which will have a knock-on effect for hundreds of thousands of people seeking emergency and maternity care.

“The minister has also given the green light to a wave of similar cash-led A&E and maternity closures and downgrades across London which will devastate services throughout the capital and spark an unprecedented campaign of public resistance.”

Mr Hunt said he understood how residents in Lewisham would feel a sense of “unfairness” as their hospital got tangled up in the financial woes of the nearby trust. He went on: “However, solving the financial crisis next door is also in the interest of the people of Lewisham because they too depend on the services which are currently part of South London Healthcare Trust.”

The health secretary said he had given his consent to the recommendation that Lewisham have a smaller A&E service, which was made in a review by NHS medical director Sir Bruce Keogh.

The revamped Lewisham service will be able to treat about 75% of the patients the A&E currently sees, Mr Hunt said, while the hospital’s maternity unit would now be a midwife-run facility.

Commenting on the announced changes, Chris Hopson, chief executive of the Foundation Trust Network, said: “South London Healthcare was a crucial test for the NHS and the secretary of state. We must have a robust and effective way of dealing with hospitals that are no longer clinically or financially sustainable.

“Jeremy Hunt’s decision is the right one, not least because it is based on the clinical evidence. It is a fair and balanced assessment of what is needed for the people of south London, and shows that Mr Hunt is prepared to make difficult decisions in support of a process that safeguards patients’ interests.”