Saatchi rues lost art of conversation as gallery donation talks collapse

Charles Saatchi's pledge to donate his gallery and modern art collection to the public is in jeopardy after talks with the Arts Council broke down.

Mr Saatchi announced the proposal in July, which would include 200 works of contemporary art valued at around £25m. Culture Secretary Jeremy Hunt called the gift, including Tracey Emin's My Bed, an "act of incredible generosity".

It is not clear why the talks failed, but it is understood that the idea of part-financing the institution after it had been handed over by buying and selling items from the donated collection runs against the code of ethics set out by the Museums' Association.

When the proposal was announced the gallery said in a statement that Saatchi felt it was "vital for the museum always to be able to display a living and evolving collection of work, rather than an archive of art history".

The intention to buy and sell items for the collection would ensure that, when Saatchi retired, the gallery would have "a strong, rotating permanent collection of major installations".

The plan also raised concerns that the creation of a new, contemporary art museum would duplicate the role of the Tate Modern.

The Saatchi Gallery's talks have now resumed with a separate, non-publicly funded arts organisation.

A spokeswoman for Mr Saatchi said: "There is nothing more to say for the time being but hopefully [there will be] in the next few weeks".

The Department of Culture, Media and Sport (DCMS) said it would not give a "running commentary" on discussions. "Ministers made clear in July that they very much welcome the announcement by Charles Saatchi of his intention to donate his collection to the nation," read the DCMS statement.

"Any donation of this type involves a range of logistical issues and the details of how it will best be taken forward have not been finalised." Under the plans, the 70,000 sq ft Saatchi Gallery in Chelsea, owned by Cadogan Estate, would become the Museum of Contemporary Art for London (Moca London). The 200 work permanent collection would also include Tragic Anatomies, by Jake and Dinos Chapman, which features mutated mannequins in a garden, and an installation by Emily Prince made up of thousands of drawings of US military personnel killed in Afghanistan and Iraq.

Damien Hirst's The Physical Impossibility of Death in the Mind of Someone Living, more commonly known as the "Shark in Formaldehyde" is another work in Mr Saatchi's collection

When the plan was announced in July, the gallery's managers said they would raise money to allow for free entrance from sponsorhip and by hosting events.

It was promised that "no charges will fall to the state" in the process of handing over the collection.

Mr Saatchi, 67, would also continue to own many hundreds of works himself, it continued, "which will be passed to his family on his death".