THE Government was embroiled in a new row yesterday over moves to appoint a leading businessman and Labour donor as chairman of the Arts Council, write Stephen Castle and Ros Wynne-Jones.

Gerry Robinson, head of the Granada Group, has been approached about the job and is expected to accept this week. A businessman first and foremost, his appointment is widely seen as a signal that cost-cutting is now the priority.

The outgoing chairman, Lord Gowrie, said he was "profoundly disappointed" with the way the Government was treating the arts. "They seem to be trying to tell Middle England 'we are not soft on the arts'. The recent cuts were totally unnecessary."

Chris Smith, Secretary of State for Culture, Media and Sport, has asked Mr Robinson, who personally donated pounds 10,000 to Labour, to preside over a thorough shake-up of the council.

The decision came in for immediate attack from some figures in the arts world. Francis Maude, Mr Smith's Tory counterpart,said: "There are three issues: his suitability for the job, other than being a Labour donor; how much time he can give it; and, given Chris Smith's tendency to try to run everything, whether there is any real role for the chairman."

Mr Robinson, who expects to spend about a day a week at the council - considerably less than his predecessor - does not intend to sever his links with Granada, the media and leisure company.

John Tusa, managing director of the Barbican, said: "If it reflects a feeling that arts institutions need more managerial kicking around rather than financial support, then we are in trouble."

But Virginia Bottomley, the former heritage secretary, welcomed the appointment. "They need a chairman of calibre and courage, with a firm grip on budgets, because they are losing pounds 50m per year... I believe he will be sufficiently hard-headed to perform exactly this job."