There are fears “irreplaceable” parts of history could be lost if part of a World War One hospital is demolished.
A housing association wants to turn derelict Cardigan Memorial Hospital, in Ceredigion, into offices and homes for the elderly.
But campaigners say it is an important part of history and must be protected.
Wales and West Housing Association said it was working with the community on plans which are in the “early stages”.
An open day is being held on Saturday to discuss the proposals.
Designed by Buckingham Palace architect John Nash, the building was enlarged and turned into a hospital for returning World War I soldiers in 1922.
It has stood derelict since the last NHS patient was treated in December 2019, when a new £20m integrated care centre was opened.
Now the housing association wants to build offices for its staff and up to 40 eco-friendly homes for elderly people on the site.
But there are concerns that the plans may see part of the building demolished.
Built on the site of a medieval priory, Nash designed the large country house, which was enlarged into the hospital.
Used to treat returning soldiers, the Memorial Hospital was opened in July 1922 by the wife of then prime minister David Lloyd George.
At its opening Dame Margaret Lloyd George said: “There could be no more practical object as a memorial to the brave men who lost their lives in the war than a hospital.”
Its upkeep was funded by donations from soldiers’ relatives.
While parts of Nash’s house remain within the hospital, it is considered too altered to be a listed building, according to the Royal Commission for Ancient and Historical Monuments of Wales.
Historian Glenn Johnson said it was a “sensitive aetiological site” and must be developed to keep the original architectural features.
“The problem with developing things slipshod is we lose things that are irreplaceable,” he said.
“But if you do things in the right way you can get the new development but within that you can retain the Nash features that survive and respect the archaeology, and that doesn’t mean great expense or great difficulty.”
Wales and West Housing are hosting a community drop in for residents to talk about the plans for the site.
Ceredigion AM Elin Jones said while many in the community where not against development, they wanted to see the building’s historical features protected.
- Capel Celyn memorial and apple kiosk get heritage listing
- Coastal erosion reveals ‘shipwreck’ skeletons on Glamorgan Heritage Coast
The Plaid Cymru AM said the hospital was a “gateway” into Cardigan and must be retained.
“It’s always possible to mix the past with the new in any development, to keep the integrity of the historical aspects and then to develop the new concepts,” she said.
Cardigan Mayor Shan Williams said there was strong feeling in the town about the safeguarding of the building.
“So many deals are done behind closed doors when the public never get a chance to voice their opinion,” she said.
“There’s no point complaining once it’s done and dusted. If you want to make a difference you need to make your voice heard against plans to bulldoze the heritage and history of Cardigan.”
She added the building would be best used as a community hospital to stop bed blocking and allow people to be cared for nearer home.
Gareth Thomas, of Wales and West Housing, said: “We don’t have any detailed plans to show, but by holding an open event we want to give local people the chance to come along and have a chat.
“We’d like to hear their ideas for the site and give us feedback.”