It also denied it had plans for a private hospital on the site.
The BBC understands a private hospital or renting space to private health providers for areas such as dental care were put forward as a possible alternative to the plans and received “mixed reaction” from the Reform cabinet.
The proposal was said to be at an early stage and has not been progressed to more formal development.
County councils cannot unilaterally set up private hospitals, which in the UK are normally provided by private healthcare companies.
However, it would be possible for the authority to provide services on a commercial basis as part of a joint venture, so long as it was legally sound and did not conflict with local NHS commissioning responsibilities.
It would still, however, be incredibly rare.