NatWest, which set up the competition in 1991, is believed to be considering alternative corporate sponsorship deals and reassessing its heavy financial involvement with contemporary art.
The move, should it be made, would coincide with the departure of Lord Alexander, the chairman and long-time champion of modern art.
Terence Collis, director of corporate affairs for NatWest, said that the budget for the art competition, worth pounds 26,000 and limited to artists under 35, is under the process of review. "No decision has been made yet about next year," Mr Collis told the Independent on Sunday. "We have never made a long-term commitment to the prize because, like all arts sponsorships, it is reviewed."
Mr Collis added that some of the bank's sponsorship deals were set up on a long-term contract. The art prize, however, was not. "Historically, we have always been committed to contemporary art," he said. "When the NatWest was formed by the National Provincial and the Westminster banks it meant the merger of two art collections and we have built a gallery to support it."
The Lothbury Gallery is housed in the former central banking hall of the old Westminster bank in the City and this year's NatWest prize exhibition was dismantled just last Friday. Mr Collis said he hoped to see "more great pictures hanging there in the future", but he could not be sure that there would be another prize show next year. "Clearly when the prize was set up there was a determination to do it for a while and it has worked well," he said.
Rosie Snell, the young East Anglian landscape artist whose work has recently caught the eye of the collector and advertising mogul Charles Saatchi, is a former nominee for the prize.
"It would be a great shame if the prize did stop," she said. "It brought me a lot of attention. Coming from Norwich, it had been difficult for me to compete with artists who were already based in London."
This year the prize was won by Callum Innes who was shortlisted for both the Turner prize and the Jerwood prize in 1995.
Graham Paton, the dealer who represents Miss Snell, and Honey Luard of White Cube, the gallery which handles the work of Damien Hirst, both expressed concern at the idea that the NatWest prize might not continue. "It would be very sad to see that money leave the art world," said Miss Luard.
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