Buttercups Nursery, at the University Hospital of North Staffordshire in Stoke-on-Trent, will shut in January. The hospital Executive says it can no longer afford its £225,000 annual subsidy.
The closure of the 40-year-old nursery affects 65 children and leaves 22 staff without jobs.
Parents of children at the nursery were given until 10 November to come up with alternative funding solutions. The board considered their proposals, along with continuing to operate the nursery at a loss until April 2012, but decided neither would be financially sustainable.
In a letter to parents and staff, deputy chief executive Chris Calkin said, 'It is with great sadness and regret that I confirm the decision is to close Buttercups Nursery.
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