Proposals had been put forward to move residents from the Elderly Mentally Infirm (EMI) unit at Reayrt Skyal and transfer Martin Ward from Ramsey and District Cottage Hospital (RDCH) to the site.
Letters were due to be sent to relatives explaining the proposals, but details were leaked to the media before families were told.
The plans prompted concern among relatives of dementia patients living at Reayrt Skyal, particularly over the potential impact of relocating vulnerable residents.
An options paper is currently being prepared for presentation to the Manx Care Board in July, setting out possible approaches for the future delivery of rehabilitation services provided by Martin Ward.
Manx Care confirmed that, during the early stages of planning, one option under consideration was relocating the service to Reayrt Skyal.
However, it now says it recognises the proposal caused ‘understandable concern among staff, residents’ families and the wider community’ and acknowledges it would have preferred to communicate directly and sensitively as plans developed.
Senior leaders have since met staff and relatives to hear their views and concerns.
A Manx Care spokesperson said: ‘Following detailed discussions with staff and families, and after careful consideration of the potential impact on residents, relatives and the local community, Manx Care has decided to remove Reayrt Skyal from the options appraisal.
‘This decision reflects the strength of feeling expressed during engagement and the importance of maintaining public confidence while ensuring patient wellbeing.
‘Work will now continue on the remaining options, with a continued focus on delivering safe, high-quality rehabilitation services that fully meet the needs of patients and the community.
‘Our thanks go to staff, families and the community for their engagement, support and understanding during what has been a sensitive and difficult situation.’