The State Hermitage Museum in St Petersburg is closing its centre in London because of financial problems, including rising exhibition costs, The Times has learnt.

The decision means that two of the three museums at Somerset House – one of the nation’s greatest 18th-century buildings – have failed, despite millions of pounds of investment from the private and public purse.

The Hermitage Rooms are closing seven years after they were converted into permanent galleries for important loans of artworks from St Petersburg.

As The Times revealed a few weeks ago, the spectacular gold and silver treasures in the Gilbert Collection are to be dispersed. The collection’s permanent home had been described as one of the most important projects of the millennium year, with more than £30 million of lottery money spent on it and an endowment fund established.

The third museum is the Courtauld Institute of Art, which includes a world-class collection of Impressionist paintings.

The next phase of the plans to open up Somerset House to the public were announced yesterday. They include completing the restoration of the buildings around the courtyard and a redevelopment of the six-storey, river-front, south wing.

The Hermitage Rooms, opened by the Prince of Wales, were designed to be a mini-replica of some of the palatial rooms in the imperial building that houses the State Hermitage Museum. The loans drew on the Russian Imperial collections, formed over more than three centuries and housed in the former Winter Palace in St Petersburg.

The Hermitage Rooms were funded by the Hermitage Development Trust, led by the British financier Jacob Rothschild and a large number of corporate and private donors, including Mikhail Khodorkovsky, the former billionaire oil tycoon, who is serving an eight-year jail term for tax evasion and fraud.

While its acclaimed show, Treasures of Catherine the Great, attracted 197,874 visitors in 2001, the exhibition Art and Seduction in 18th-Century France display drew only 13,853 visitors this year. Professor Mikhail Piotrovsky, director of the State Hermitage Museum, confirmed that rising exhibition costs, at a time when funding was increasingly hard to obtain, had led the Hermitage and the Courtauld to shift the focus of their alliance from exhibitions to scholarship. He said: “One must move with the times and be sensitive to changing needs. We have provided a London audience with insight into many facets of our collection over the last seven years.”

A spokeswoman said that the Hermitage would now focus on academic research. She said that its 12 exhibitions over the past seven years had attracted 500,000 visitors, raising more than £400,000 for St Petersburg. The cost of shipping objects from Russia was proving too expensive, she said, adding that part of the problem was that space was limited.

Somerset House - designed by Sir William Chambers, the architecture tutor of George III – previously housed government departments, and the Gilbert Collection from the bequest of Sir Arthur Gilbert, a Londoner who made his fortune in property in California and gave more than 800 items to Britain in 1996, before his death in 2001.

The collection, which is to be moved in limited form to the Victoria and Albert Museum (V&A), had 173,352 visitors in the first 11 months after it opened in 2000. The figure slumped to 37,885 in 2005.

Decline and fall

— Treasures of Catherine the Great, a dazzling exhibition of jewels, decorative art and paintings, made up the inaugural show at Somerset House (2001): 197,874 visitors

— French Drawings and Paintings – works by Poussin to Picasso from the Hermitage’s magnificent but largely inaccessible collection of master drawings (2001-02): 37,673 visitors

— Painting, Passion and Politics – 34 works, including Rembrandt, from the Walpole collection, most returning to England for the first time in more than 200 years (2002-03): 45,581 visitors

— Peter Paul Rubens – about 40 oil sketches and ten related drawings from the Hermitage and the Courtauld Institute gallery (2003-04): 20,816 visitors

— Art and Seduction in 18th-Century France, which included paintings, drawings and a recently discovered group of prints (2006-07): 13,853 visitors

Source: Hermitage Rooms

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