All eye surgery has been cancelled at the hospital after some patients were found to have blurred vision and suffered damage to their corneas.
The investigation is concentrating on the jelly-like substance put into the eye during a cataract operation, a hospital spokesman said. All the problems relate to operations performed between 14 and 23 July, when the hospital had just switched to a new brand of the eye jelly.
The substance is put into the eye during operations to separate the iris from the cornea.
Up to 12 patients are believed to have been affected by the damage according to Chris Canning, the hospital's clinical ophthalmology director.
He said about 50 patients were treated during the 10-day period and up to 12 have suffered corneal damage and blurred vision.
Mr Canning said it was not yet known if the damage would be permanent. The affected patients were being offered support from the hospital.
The manufacturer of the jelly has been alerted, as have the Medical Devices Agency and the Medicine Control Agency, so other hospitals will be notified of the problem.
The hospital said it was considering the possibility that it had been supplied with one or more faulty batches.
Mr Canning said staff had been extremely distressed by the discovery. "As far as we can tell at present, perhaps 12 patients have some degree of corneal damage and blurred vision consistent with a toxic reaction," he said. At this stage we simply do not know whether or not the damage will be permanent, although there are signs of the cornea clearing in some of the patients."
He said the eye unit's operating theatres would remain closed until the hospital was completely satisfied it had isolated the cause of the problem. It would then consult the Royal College of Ophthalmologists before resuming cataract surgery, he said.
Peter Campion, spokesman for the Southampton University Hospitals NHS Trust, which controls the hospital, said tests on the jelly were being carried out by the Medical Devices Agency. He said the hospital would not release the jelly's brand name or that of its manufacturer as it had not yet been proved to be at fault.
Mr Campion said that if the corneal damage proved to be permanent, the patients would be offered advice on alternatives, including corneal grafts.