David Clark.

The Dunedin Hospital rebuild could top $1billion, Dunedin North MP David Clark says.

Dr Clark said ''sources close to the rebuild'' told him the new projected cost of a full rebuild.

''If a decision is made to replace the ward block, it seems likely that the cost will blow out to over $1billion.

''And that speaks to neglect in maintenance over time and the chronic underfunding of health in the South,'' Dr Clark said.

The ward block was commissioned in 1980.

Officials have refused to confirm whether it needs to be replaced, but have admitted it might be necessary.

An earlier figure of $300million, released in 2015, remains the official estimate.

That figure pertains only to the cost of rebuilding the older clinical services building, and that itself was an increase on the previous estimate of $200million.

A Government assessment last year said the ward block had suffered from ''deferred maintenance''.

Dr Clark said years of delay meant projected costs continued to grow.

''The longer the decision to get on with the rebuild is delayed, the larger the bill for that rebuild.''

As the hospital became more run-down, staff and services suffered.

''We've seen [specialist] training provision downgraded; we've seen asbestos go from an occasional to a chronic problem.

''We've seen hospital theatres leaking and delaying the delivery of healthcare.

''All of these things could have been prevented if action had been taken sooner.

''Instead, we have faced ongoing delays since the time I first became concerned in 2014 about the lack of a [business] case before Cabinet.

''This ongoing delay has a real cost in financial terms, but also in terms of delivering healthcare in the South,'' Dr Clark said.

Appointed rebuild partnership group chairman Andrew Blair refused to be drawn on the $1billion figure, saying new costings would be part of the business case going to the Government's capital investment committee next month.

''However, we have been open about the fact the cost of the redevelopment will depend on what option is progressed.

''Clearly, if the decision is made to replace the ward block as opposed to refurbishing it, the cost will increase.

''The $300million provisional cost will be updated at the time the indicative business case is released,'' Mr Blair said in an email.

In April, it emerged the Ministry of Health had postponed a market sounding for a public-private partnership because of uncertainty about the size of the redevelopment.

A spokeswoman for Health Minister Dr Jonathan Coleman said the Government was unable to confirm costings yet.