Unions are considering industrial action in what they fear will be a bitter fight against cuts at one of the most financially troubled trusts in the UK.

An interim chief executive, Graham Smith, has been parachuted into Epsom and St Helier University Hospitals trust, which has seen the departure of its chief executive and chair over the last month.

The trust, which spans south London and Surrey, has a history of controversy. Chief executive Lorraine Clifton departed on New Year's Eve, after three years in post. She had faced local criticism for implementing a financial recovery plan that will cut 200 beds and nearly 500 jobs to stave off a£24m deficit.

Last week Michael Doherty, trust chair since 2002, announced his resignation. The trust is refusing to make any comment on the departures. Mr Doherty says he will leave once the Appointments Commission has appointed a new chair.

The trust has faced rows over plans to create a new 'critical care hospital' and 10 satellite minor injury units in the area. The matter was delayed when it was referred to the health secretary Patricia Hewitt, who overruled the trust's preferred option.

The trust returned to its original proposals when it emerged that her suggestion would create planning problems.

Last month, Surrey county council's health overview committee took the unprecedented step of using legal powers to order a halt to the trust's financial recovery plans pending a full public inquiry.

The trust's new interim chief has held several short-term roles at trusts in difficulty, including East and North Herts, Worcestershire Acute Hospitals and Hereford Hospitals trusts.

Unison branch secretary Kevin O'Brien said: 'The trust is in an absolute mess. We are worried if anyone would want the job of chief executive or chair - specially as there is a London-wide review going on and we are hearing rumours of a merger with St George's.

'We fear a slash and burn policy, but we expect Mr Smith to go through the formal consultation process on any changes - if not we will follow the formal disputes procedure and may consider a ballot on industrial action.'