Scandal-hit Mid Staffordshire NHS Foundation Trust is "clinically and financially unsustainable", the health regulator said.
An independent investigation concluded that the Trust will not be able to provide safe care on a sustainable basis in the future.
The number of patients who attended the Trust's hospitals declined following a series of highly critical reports about it's care standards, according the report by a team of experts appointed by regulator Monitor. In all departments the "volume of activity" at the trust is below the national average.
Despite significant investment in staff, the Trust does not have the level of employees needed to run a 24/7, consultant-led service in the A&E, emergency surgery and paediatric departments, the report states.
Even if it was to increase minimum consultant levels, it is likely that the number of patients referred to the Trust would be "insufficient" for the senior medics to maintain their skills and experience, the Contingency Planning Team (CPT) of experts said.
And employing more staff could prove difficult because of "recent reputational challenges", they add.
Finances at the Trust, which is deemed to be one of the smallest in the country, also have a bleak outlook. Last year the Department of Health (DH) was forced to give the Trust a £20 million boost to maintain services for patients.
The CPT, made up of experts from Ernst & Young and McKinsey & Company, concluded that the Trust cannot achieve financial sustainability within the next five years without "significant external intervention".
A Department of Health spokeswoman said: "Despite improvements, Mid Staffordshire is still facing serious financial challenges. This puts at risk its work on improving services for patients."
"It's right that Monitor is starting to explore options with the Trust and local NHS professionals. While this process is going on, all involved need to be certain that they are not taking their eye off the most important issue of all - maintaining and improving their frontline patient care," she added.
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