DURHAM County Council is to cut its annual funding to the Bowes Museum at Barnard Castle.

Under a five-year agreement replacing a deal which runs out next year, the museum will receive £531,827 annually.

The deal amounts to more than £2.6m, but the annual sum will be less in real terms because each payment will stay the same and not take inflation into account.

Previously, annual payments have risen according to the rate of inflation, but the authority now faces tighter budget restraints.

At a meeting in County Hall this week, cabinet members said the French-style chateau museum played an important part in the region’s tourism industry.

Coun Eunice Huntington, cabinet member for healthier communities, said the Bowes Museum had one of the finest exhibitions of fine art outside London and was recognised nationally and internationally.

“It has undergone extensive renovation.

As a result, they have changed the basement into a unit where lectures can take place, so they can increase education.

“They are planning to exhibit some items, including tapestries and fabrics in a more imaginative and innovative way. The museum has maintained good visitor numbers despite the extensive renovations. It’s also moving towards a shortcut from Barnard Castle to the museum, making it easier to visit.

“It’s an important contribution to the local economy and we need to support it.”

Coun Alan Napier, deputy leader, said (of the funding decision): “We believe this will encourage the trust to operate in a more efficient manner.”

A report to the cabinet suggested two other funding options other than the one that was taken up.

One would have seen an increase in funding to enable new developments and attract major exhibitions; the other was to pledge an annual figure, taking into account inflation, for three, rather than five years.

The museum embarked on a multi-million pound renovation scheme in 2005 and is close to opening a new silver and metals gallery.

Museum director Adrian Jenkins, said: “We’ve not received communication from Durham County Council at present and we look forward to receiving their formal communication.”