The Swedish government has dismissed the board of the Karolinska Institute after an investigation showed it was negligent when hiring surgeon Paolo Macchiarini and letting him operate on patients.

The medical scandal that includes numerous accusations of scientific fraud and the death of patients is a severe blow to the reputation of the institution that awards the Nobel Prize for Medicine.

The hiring of Italian surgeon Macchiarini had already led to the resignation of the secretary of the Nobel Committee at the Institute as well as the then chancellor in February and to the Institute chairman last week.

Macchiarini was fired in March when Karolinska said he had supplied false information on his resume and was guilty of scientific negligence after two of his patients died.

Swedish prosecutors are investigating Macchiarini on suspicion of gross criminal negligence leading to another person's death. He has denied any wrongdoing.

"Scandal is the right word," Minister for Higher Education and Research Helene Hellmark Knutsson told a news conference.

"People have been harmed because of the acting of the Karolinska Institute and also the Karolinska University Hospital," she said.

The Karolinka medical institute was found to have contributed to patient deaths. Photo: Shutterstock

The government announced the firings after an external investigation commissioned by the Institute was presented on Monday. The investigator said that the management had shown "a stunning indifference" towards a vast amount of very negative references when hiring Macchiarini.

Hellmark Knutsson said the investigation showed that the Institute had broken laws and regulations and that it had shown disrespect towards laws, ethics and morale.

She said that as soon as a new board had been recruited, the board members that had not already quit after the Macchiarini scandal would be replaced.

The country's University Chancellor Harriet Wallberg, who was heading the Karolinska Institute when Macchiarini was hired, would also have to leave her position, Hellmark Knutsson said.

Bo Risberg, former head of the ethics committee at Karolinska, has called for the Nobel Prize for Medecine to be put on ice for two years and for prize money to be used to compensate the relatives of the patients Macchiarini operated on.

Macchiarini was employed as a researcher into stem cell biology at the Karolinska Institute and consultant at Karolinska University Hospital in 2010.

Another investigation that was presented last week centred on three operations conducted at the Karolinska University Hospital between 2011 and 2012 in which Macchiarini transplanted synthetic tracheas coated with stem cells into patients.

That investigation showed he performed the operations before sufficient study had been done on the procedure and that the operations could not be justified on the grounds of being life-saving.

Two of the patients have since died while the third remains hospitalised.