The Care Quality Commission has issued Mid Staffordshire Foundation Trust with a formal warning to improve staffing levels in accident and emergency or risk service closures.

The CQC’s concerns follow a visit in September which found the department was short staffed with insufficient suitably qualified nurses on duty. It found contingency arrangements to cope with staff absences were not robust enough to ensure patient safety was upheld.

Problems in A&E were uncovered by the CQC’s predecessor the Healthcare Commission during its investigation of the trust in 2008 which exposed poor standards of care.

A public inquiry into the failure of the regulatory and supervisory system to pick up problems at the trust is due to report back early next year.

CQC regional director for the Midlands Andrea Gordon said the regulator was “disappointed” that staffing issues previously highlighted had still not been completely addressed and would not “hesitate” to use its legal powers to fine the trust, close the service or restrict its opening hours.

In a statement, chief executive Lyn Hill-Tout said the warning notice undermined the trust’s attempts to recruit to A&E. The trust was already considering a short term closure of the service overnight, she said.

A report to the trust’s recent board meeting reported nursing was almost at required levels but most of the new recruits were relatively inexperienced band fives. Only two of the six consultant posts had a substantive appointment and there were significant vacancies for junior and middle grade doctors, the report said,

Last week the public inquiry heard from nurse Helen Donnelly, who worked in A&E at the trust between 2004 and 2008.

Ms Donnelly raised concerns about the “commonplace … massaging” of figures to meet the four-hour A&E target with her superiors in 2007. She described how she was verbally abused and physically threatened by colleagues for speaking out, and said there was a culture of fear in the department.

She said: “Sometimes it was just pure meanness and nastiness, targeted not just at staff but at patients as well… having worked in other trusts, both before and since, it’s just something that I hadn’t experienced elsewhere.”

During its final week the inquiry also heard from CQC director of intelligence Richard Hamblin, who was called back to the inquiry to give an account of why the regulator had not volunteered a document which appeared to show inconsistencies between what he and other members of the senior team had told the inquiry and how the processes worked in practice.

He said he thought the document - produced by an experienced but relatively junior member of staff - had “some value because it’s always good that people are thinking” but had not thrown up “any major concerns about what we’d said”.