The British Council may be forced to put its £200 million art collection up for sale as a result of 'financial peril' threatening the institution.
The council is facing an outstanding debt of £197 million after taking out a £250 million emergency loan from the government during the pandemic.
Due to the poor credit rating, the government charges interest of £14 million a year, according to the Times.
It means that the paintings in the collection – including works by artists such as Henry Moore, Tracey Emin and David Hockney – are now under threat.
The council, based in London's Olympic Park, is responsible for promoting British culture and language abroad.
This includes advocating for British arts and culture, supporting education and promoting the English language.
It is estimated that it reached almost 600 million people last year and generated 85 percent of its revenue through commercial means, such as administering exams and providing English lessons.
During its 90-year history, after its founding in 1934, the council has become an important representative of the United Kingdom abroad.
Iconic masterpieces now at risk of being sold, including those by David Hockney (pictured)
Works by Tracey Emin (pictured) are also at risk as the British Council faces 'financial peril'
But chief executive Scott McDonald has now warned that the company is facing increasing 'financial dangers' that could force a sell-off of masterpieces.
These include works such as a 1980 piece by Freud entitled Nude Portrait with Egg, and a 1994 dot painting by Damien Hirst.
Others potentially at risk include the very first artwork purchased, Lucian Freud's Girl with Roses, and a 1942 Duncan Grant canvas from the Bloomsbury group's home in Sussex.
About a fifth of the works are on loan around the world at any one time, while the rest remain in storage.
Half of the 9,000-piece collection is said to be protected from sale due to agreements with artists who donated their works on the condition that they would never be sold.
But the rest are at risk if sold, with the British Council refusing to provide a list of affected works.
Mr McDonald is said to have told MPs last week that he was 'looking into what we can sell from the 50 per cent [of the collection] that is not limited'.
He added: 'Everything the British Council has, which is not that much anymore, we are looking into selling.'
The British Council's very first purchased artwork, Girl with Roses, may be at risk of being sold
A 1994 dot painting by Damien Hirst (photo) could also be auctioned
This could also include half of the forty buildings from around the world.
In addition, almost 1,500 British Council employees have reportedly already been made redundant.
The British Council said in a statement: 'A British Council withdrawal is a blow to Britain in the battle for influence on the world stage.
“We are taking all steps necessary to secure the long-term financial sustainability of the British Council, including a review of our assets.
“We urge the government to take urgent action to ease the burden of our pandemic loan and the pressures of a decade of declining grant funding to ensure we can continue our mission.”
