Wales' largest hospital may have to remove all the body and tissue samples it has stored in its mortuary if an order against it is enforced.Post-mortem examinations at the University Hospital of Wales (UHW) were suspended after inspectors found major problems, it emerged on Tuesday.
The Human Tissue Authority (HTA) highlighted problems in procedures, facilities and equipment.
It has now issued a proposal to revoke the hospital's licence to store bodies.
Cardiff and Vale NHS Trust set up an urgent inquiry following the suspension and said it would take immediate action on recommendations.
The examinations are now taking place at other facilities.
The examinations at UHW's mortuary were halted last Thursday after its licence was suspended by the HTA.
The HTA has since issued the trust with a notice of a "proposal to revoke" the licence for storing bodies and any tissues removed from them, but said it was too early to say if it would enforce the order.
The authority said it accepted the implications of revoking a second licence "would be considerable" as all bodies and tissues would have to transferred to a facility that was licensed.
In a statement, the HTA said: "Notice of proposal to revoke this licence has been issued.
"In practice this means that the trust can continue to store bodies for post-mortem examination, continue to store all the relevant material that is currently retained on the premises specified by the licence and continue to store material that needs specialist histological examination until the 28 statutory notice period for representations is reached, or later, a representations hearing is held.
"We can not say at the moment whether the revocation will be enforced."
It confirmed the inspection carried out at the end of July which prompted the withdrawal of the post-mortem licence was not routine, but was unable to say whether it was acting on information it had received.
When the suspension was announced, HTA Director of Regulation Sandy Mather said if something went wrong with mortuary work it had the potential to cause "significant distress".
Jan Williams, who became the trust chief executive in July, said: "I am disappointed to come in and find myself in receipt of the HTA report.
"I accept fully the report's findings and recommendations and have taken immediate action to ensure that we address the concerns raised swiftly so that our licence suspension can be lifted as soon as possible.
"In addition, I have set up an urgent inquiry into the circumstances that led to the HTA decision, to be conducted by Healthcare Inspectorate Wales (HIW)."
Ms Williams said the post-mortem examinations would be carried out at other locations, including Llandough hospital, which is part of Cardiff and Vale NHS Trust.