The health trusts running the two main hospitals serving the area have by far the biggest debts in London, raising fears for patient safety, jobs and services.
NHS figures show Barts Health, which runs Whipps Cross Hospital in Leytonstone, and Barking Havering and Redbridge Hospitals Trust (BHRUT), in charge of King George Hospital in Goodmayes, are both about £39million in the red.
This is nearly twice as much as the next most indebted trust.
Both hospitals have been ordered to raise care standards after damning assessments by the Care Quality Commission, making the job of saving millions without having an impact on patients even tougher.
Labour’s deputy leader of the council Wes Streeting, who is also cabinet member for health, has warned of difficult times ahead and fears patient safety could be jeopardised by attempts to address the shortfall.
He said; “It is worrying with BHRUT being in special measures and having to tackle these financial issues too, the only outcome I can see is job losses and closure of services.
“There are serious concerns about the quality of services provided by the Barts trust too.
“How both will cope with their deficits could cause serious risks for patients.
“The council is committed to working with both the trusts to find a solution to this financial crisis.”
BHRUT finance director, Rob Cooper, said an improvement plan published this week will improve standards and save money.
He added: “For example we plan to substantially reduce the number of agency staff we use. This will save millions of pounds, but we also know it will improve care for patients by having permanent, dedicated staff on our wards.
“We are also working to reduce the length of time patients have to stay in hospital by cutting waiting times for test results and making sure we have consultants on the wards seven days a week, caring for patients and discharging them back home as soon as they are ready.
“We are still investing heavily in front line care and equipment. These cost saving measures are not remotely detrimental to patient care. In fact they will improve it.”
Barts Health, which is one of the largest health trusts in the country, released a statement which said: “The reported deficit of £39m for the last financial year is significantly less than the £50m deficit forecast, and was made possible by the safe introduction of efficiency savings across Barts Health while at the same time improving our income performance.
"We remain committed to meeting our savings targets through the continued reduction of inefficiencies, while still providing the highest standards of patient care.
“In November 2013 we launched a recruitment drive to significantly increase the number of permanent staff across the Trust, thereby reducing the reliance on more expensive bank and agency staff.
"This process is ongoing and to date we have recruited in excess of 1900 new members of staff, with a target of recruiting over 4500 new employees by the end of this year.”
Leader of the Save King George Hospital campaign, Andy Walker, has called for central government to bail out the trusts to ensure patient safety.
He said: “Hospitals are so important that they need to be helped, they need to be bailed out now by government to get them out of the red.
“It is unacceptable for the reduction in services at both trusts to continue because it is going to have severe implications on patients. The system will not be able to cope.”
The deficit figures were obtained by Labour from the House of Commons library.