A Health and Social Services consultant, who asked not to be named, warned that as dementia beds were scrapped at the redeveloped extra care homes and the hospital, the private sector would struggle to cope with the influx.
The gallery at Beau Sejour was packed with members of the public who were backing a scheme to convert the former Green Acres Hotel into a specialist dementia care home.
But planners and the Commerce and Employment Department were out in force to stop the project, over concerns that they would set a precedent for other hotels.
Marketing and tourism director Mike Hopkins warned that allowing the scheme to go ahead would damage the tourism industry and shake tour operators' confidence in the island.
The care home project has been put forward by a group of doctors, who want to create a 40-bed specialist facility, with day care and respite rooms.
