Chris Smith, the Culture Secretary, has decided that more decisions should be made at local level and the central organisation revamped.
A new body, combining English Heritage and the Royal Commission on the Historical Monuments of England, is expected to be set up. It will make all decisions on the listing and conservation of historic buildings and sites.
Sir Jocelyn Stevens, the chairman of English Heritage since 1992, is thought unlikely to be made the head of the organisation. Around half the members of the two existing boards will almost certainly be asked to leave.
There are also likely to be redundancies from the staff of both bodies as the head office operations will be merged.
The decision, expected to be announced later this year, follows a review of the 47 quangos which are responsible for running the country's arts, culture and heritage. Mr Smith has ordered officials to identify areas which can be merged in order to slash the number of advisory bodies and cut red tape.
English Heritage, set up in 1983, is at the top of the list for reform. Sources said there was too much duplication in its work with that of the Royal Commission, which lists buildings and ancient sites. Ministers believe that the best solution is to scrap the two organisations and bring their responsibilities together under a new, streamlined and efficient body.
"The Culture Secretary is determined that as much money as possible should be spent where it is needed and not on unnecessary bureaucracy and red tape," a source at the Department for Culture said.
However, the move will lead to accusations that the Government is scaling down its commitment to the country's built heritage, a less fashionable sphere than the "Cool Britannia" arts of music or film.
Although no decision has been made on what the new organisation should be called, sources said it was "very unlikely" that it would keep the name English Heritage. "This would be a completely new body," a source said.
Mr Smith changed his Department's name from National Heritage to Culture, Media and Sport because he felt the original was "too backward looking" and wanted to be in tune with modern Britain.
The Government has gradually reduced its grants to English Heritage in recent years. They have dropped by 15 per cent in real terms since 1992 and last year fell by pounds 2m to pounds 102m. The organisation tops up its state subsidy with around pounds 28m in donations.
The Royal Commission on the Historical Monuments of England, headed by Lord Faringdon, is a much smaller organisation. It receives nearly pounds 11m a year in state grants.
Peter Ainsworth, the shadow culture spokesman, condemned the changes as "unacceptable". He said: "The danger is that in the name of streamlining, 10 regional bureaucracies will be created instead. There must be a proper national organisation to oversee England's heritage."
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