Andy Lees, 72, handed out £12,000 of his life savings to family and friends because he believed he was dying.
He also spent a further £6,500 planning his own funeral.
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But a year after their initial diagnosis, staff at St John's Hospital in Livingston, West Lothian, have now told the pensioner he does not have terminal cancer and is suffering from a different illness.
Mr Lees, from Blackburn, West Lothian, said: "I nearly fell through the floor when they told me, I couldn't believe it. I gave away my life savings because I didn't think I would need them. Now I am broke.
"My family and I went through hell because of this. I am definitely considering suing the hospital. I was devastated as was my whole family."
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