Dunedin's mayor isn't backing down on fighting for the city's new hospital ahead of potential cuts.

The Government has asked Health NZ for two options to deliver the project - within budget - after costs escalated to an estimated $3 billion from an original estimate of between $1.2b-$1.4b.

About 35,000 people took to the streets in Dunedin on Saturday to protest the proposed downgrades.

Mayor Jules Radich says there will be detrimental effects if it isn't built.

"Number one- people will die. The Government will have blood on its hands because this hospital is needed for the level of tertiary care that is required throughout the whole region."

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