Gregor Muir: 'Sorting out the ICA is without question a challenge...'

Gregor Muir tells Rob Sharp how he plans to reinvent the venue after Ekow Eshun's tenure – and why private backers are his top priority

Despite the pomp of its grand building on London's Mall, The Institute of Contemporary Arts (ICA) was founded in 1947 as a vibrant alternative to the conservative corridors of the Royal Academy. It was run by artists, for artists, and went on to introduce Britain to Pop Art, held Picasso's first British exhibition and gave Damien Hirst an early solo show in 1991, long before he was a household name.

But after the broadcaster Ekow Eshun took charge in 2005, the institute hit a "perfect storm" which threatened its very existence. Eshun and the chair of the organisation's board, the BBC broadcaster Alan Yentob, became embroiled in financial crisis and attracted accusations of mismanagement as its coffers ran dry. "Should we let the ICA die?" shouted headlines last year. Yentob and Eshun departed ignominiously, and, in March, the Arts Council cut its grant by 42 per cent.

It might not be out of trouble yet. The ICA's new director Gregor Muir, who took charge in February, refuses to rule out redundancies, even though Eshun oversaw a swathe of staff cuts last year. Muir says a "period of discussion is ongoing".

"We are looking at ways in which we can make improvements, and it's a difficult period," he says. "We are not alone in facing cuts. And we are not immune to those processes which many institutions are going through. What we have to do is take stock of what we are facing. We have to deliver an excellent programme based on the resources available."

Part of this process is putting artists' needs back at the organisation's forefront. Muir has appointed Roger Hiorns, a 33-year-old former Turner Prize nominee from Birmingham, as the head of an artists' advisory committee drawn from across London's art world in an attempt to carve out a new direction. Hiorns said that with Muir's approval the group wanted to create the "new version" of the ICA.

"It wants to find itself at the centre of things in a meaningful way," explains Hiorns. "Institutions like the ICA are always under crisis. Certain crises are useful. It's good to be at the edge. And then again certain crises aren't useful, just time-consuming. We are trying to push it towards some useful crisis."

Muir, 46, has a long, rich involvement with London's artistic community. He trained at south London's Camberwell College of Arts in the mid to late 80s before becoming a journalist. He funded his writing working behind a till in the Royal Academy's bookshop, enjoying a social life at the centre of London's vibrant artistic community. Muir became friends with many of the Young British Artists (YBAs), later documenting their antics (Tracey Emin throwing up; Damien Hirst asking passing women to help him extricate his testicles from his trouser zipper) in his 2009 book Lucky Kunst.

"As the entire nation tightened its belt, young artists just wanted to show their work: they had no money anyway, and little to lose," writes Muir of the time.

The art critic Matthew Collings, however, described Muir's treatment of the London art clique as "bordering on the sycophantic". His first break in the art world came in 1997 aged 33 working for the East End gallery Lux where he exhibited work by the likes of the Belgian artist Carsten Höller. The same year, he curated a show at the ICA called Assuming Positions, and went on to curate shows involving the YBAs Damien Hirst, Sarah Lucas and Angus Fairhurst at Tate Britain before he joined the private gallery Hauser and Wirth as director in 2004.

One wonders why he would give up such a comfortable job. "The ICA has an incredible pedigree," he says. "It was the most exciting challenge I could think of. It was without question a challenge." In person, Muir is jocular, if guarded, no doubt as a result of the ICA's recent history.

Among his imminent challenges will be making up the shortfall left by the Arts Council's cuts, under which the ICA's funding will decrease from £1.3m a year to £900,000 by 2015. Years of financial peril, including salary savings of £1m over the last year, have taken their toll on the institution's fiscal clout.

The private sector can provide part of the solution. Muir's contacts have clearly already helped, with the addition of 30 big-name "patrons", or regular benefactors, since he joined. Those patrons now include the supermarket heir Alex Sainsbury and art-world luminaries such as Harry Blain, founder of central London gallery Haunch of Venison, and the collector Anita Zabludowicz.

"I think it's clear we live in age where institutions have to be wise to the workings of the private sector in terms of their relationship and their partnerships," he says. "And perhaps my coming from the private sector may have an influence on how we forge ahead. We have to be increasingly sophisticated about how entrepreneurial we are." A fundraising gala dinner earlier this year attracted Hirst.

"I think one can look to managers and consultants but at the end of the day what artists have to say is really important," adds Muir. "I think it's pertinent to say that I come from an arts background. I've been in it for as long as I can remember, curating two exhibitions here before I joined. In my experience the ICA benefits from being in touch with the arts and being a place that focuses on talent. That requires involvement."

The ICA is currently showing work by the London-based artist Pablo Bronstein, who creates Regency-style artworks including elaborate furniture and performance pieces. For his exhibition, which closes next month, Bronstein has taken over the whole of the ICA's grade-I listed John Nash terrace. Muir has allowed the artist to shift walls around internally to his own specifications, a flexibility that is likely to continue.

"We really benefit from a relationship with artists," he says. "We have a gallery that can take risks, and we are able to support that risk."

So what now? Events in the pipeline include an exhibition of rare work by the US artist and film-maker Jack Smith – who Andy Warhol described as the "only person I would ever copy" – and work by Frances Stark, an artist based in Los Angeles. Stark will be showing an animation previewed at this year's Venice Biennale, featuring two avatars meeting on a dating website and having an affair. It is part of what Muir describes as the ICA's "commitment to challenging, inter-disciplinary art".

"Come to the ICA more," concludes Muir, glancing over the Mall from a first-floor window. "See what goes on. It's a place for experiment, a laboratory of ideas. We have the perfect opportunity to take people's work to the next level, to make rewarding relationships. We play a role with young artists and film-makers. This should be the place where you hear about things first."

A Life in Brief

* Born London, 29 November 1964; grew up in Brighton

* Studied painting at Camberwell School of Arts and Craft in the mid to late-1980s

* Became friends with many of the Young British Artists including Tracey Emin, and later wrote 'Lucky Kunst: the Rise and Fall of Young British Art'

* Was director of the commercial art gallery Hauser & Wirth in London

* Earlier career included founding the Lux Gallery, east London, in 1997, and a stint as a curator at the Tate

* Single. Lives in Marylebone.