THE Middle East is to get its first world-class art gallery after the Guggenheim Foundation signed a multimillion-pound deal at the weekend with the rulers of Abu Dhabi.

The New York-based foundation intends to build a museum in the largest of the United Arab Emirates that will be bigger and bolder than its existing galleries in New York, Bilbao, Venice, Berlin and Las Vegas.

Frank Gehry, the architect whose designs for the Guggenheim in Bilbao helped to transform the Basque city into a vibrant cultural centre, has been commissioned to create a radical building that could cost $200 million (£108 million). It will house a collection of modern and contemporary art consisting of works from the Guggenheim’s collection and art acquired with grants from Abu Dhabi that are expected to exceed the $10 million level set by the Basque government in Bilbao. The emirate, through its tourist agency, will pay for the costs of the building and administration in exchange for the Guggenheim’s expertise and brand. The deal, masterminded by Crown Prince Sheikh Mohammad bin Zayed al-Nahyan, is a coup for Abu Dhabi at a time when Arab states are competing to become tourist destinations.

The emirate has stolen a march on Dubai, which had also been in negotiations with the Guggenheim in its attempt to become the dominant cultural centre in the Middle East.

Despite the oil wealth of Abu Dhabi — it has an estimated 9.2 per cent of the world’s proven reserves — the ruling family knows that it must find other sources of income before the wells run dry.

The Crown Prince has initiated a $1.5 billion project to turn Saadiyat (Happiness) Island, an empty patch of land half the size of Bermuda and 500 metres off the coast of Abu Dhabi city, into a tourist resort that will include at least four museums. The emirate is also in negotiations with the Louvre over a classical museum.

The state currently has no public art galleries and little experience of Western contemporary art, but the Guggenheim played down concerns that it would have to censor travelling exhibitions for Abu Dhabi.

Thomas Krens, the Guggenheim’s director, said that curators would remove works liable to offend Islamic sensibilities such as nudes, but they would represent a tiny proportion of most shows. “It’s not so much a question of censorship but of sensitivity to local traditions,” he said.

The architect promised to deliver a design that would rival his iconic building in Bilbao. “I don’t think I have to be conservative because they’re asking for something really special,” Mr Gehry said.

He has not drawn up any designs for the 30,000 square metre building, but is considering raising the museum on stilts. He said: “It should be part of where it is built and not just a foreign object that looks like it has landed from outer space.”

He is being pressed to provide a design within four months so that the building can be completed within five years.

Mr Krens said that 130 other cities had approached him since the success of the Bilbao museum in generating investment, but none had been as decisive as Abu Dhabi. Other projects, such as a proposed museum in Rio de Janeiro in Brazil, had failed because of political fighting over the large sums of money involved.

ART HOUSES

The Guggenheim family made its fortune in mining and lace