Bosses at West Middlesex Hospital have apologised for turning away a war hero and claiming he owed them money.
Tul Bahadur Pun, who settled in Martindale Road, Hounslow, last year, was refused heart treatment on Monday at the same hospital where he received life-saving surgery.
Health chiefs humiliated the 87-year-old Gurkha, one of just 10 living VC holders, by claiming he had misled them over his immigration status.
In front of stunned patients, they also threatened him with a bill for thousands of pounds for past treatment.
Mr Pun, who fought a long battle for UK residency, was told his indefinite leave to enter visa did not entitle him to care on the NHS.
"I could not sleep worrying about having to pay thousands of pounds for the treatment I have already had," said Mr Pun, who single handedly wiped out a Japanese machine gun platoon in the Second World War.
"I have not misled anyone, the British Government allow me to live here."
Red-faced bosses at the hospital in Twickenham Road, Isleworth, quickly reversed their decision and have offered Mr Pun a new appointment.
A spokesman said it had a policy of questioning patients to ensure they are entitled to free treatment.