The cost to the taxpayer of buying the Titian masterpiece Diana and Actaeon could top £100m, double the asking price.

The Duke of Sutherland’s offer to sell the painting to the national galleries for a “bargain” £50m would deprive the public purse of up to £60m in taxes which would have been raised if the painting had been sold at auction for its reputed £150m value.

By selling to a public collection, the duke, who owns an estate in Scotland and farm in Suffolk, will avoid inheritance and capital gains tax on the painting.

Last week it emerged that the Titian, regarded as one of the finest Renaissance works in private hands, was poised to be saved for the nation following a series of pledges. Sources close to the National Gallery in London and the National Galleries of Scotland were “confident” the £50m would raised ahead of the December 31 deadline. Private sources have pledged £9m and £41m will come from the UK and Scottish governments and other public bodies.

The Titian, and its companion piece Diana and Callisto, have been on loan to the National Galleries of Scotland since 1945. The duke paid no inheritance tax on them when they were bequeathed by his cousin, the sixth duke, in 2000, because they remained on loan.

If the galleries secure Diana and Actaeon, they will have four more years to buy the other work. The picture would be sold to the nation under a private treaty sale, a scheme that offers tax breaks to encourage private owners of “preeminent” works to sell them to public galleries. The Treasury waives inheritance and capital gains tax in return for the work being sold below market value. The seller receives 25% of the saving and the galleries 75%.

Ian Davidson, Labour MP for Glasgow South West, said the cost to the public purse could not be justified in the current economic climate.

“It is morally reprehensible that one of the richest men in Scotland is dodging tax on a huge payment partly from taxpayers, virtually all of whom are poorer than him,” he said.

“This cash is for paintings few of my constituents have the least interest in. Let him sell them to the Americans . . . [so] we get the tax that is due.”

Ted Brocklebank, culture spokesman for the Scottish Conservatives, added: “This is a staggering figure, especially in these difficult times. However, I still feel the painting should be saved for the nation.”

A spokesman for Sutherland disagreed that the proposed sale was morally reprehensible and said the private treaty scheme had enabled the nation to acquire many great works.

He said Diana and Actaeon could fetch £150m on the open market: “Far from dodging tax, we estimate that, by selling to the nation on these terms, the Duke is sacrificing an open-market profit, net of all taxes, which might have been as much as double what he would obtain through this sale.”

Art and the public purse

The Madonna of the Pinks by Raphael was bought from the Duke of Northumberland in 2004 by the National Gallery for £22m, half of which was public money.

Canova’s sculpture The Three Graces was bought in 1994 by the National Galleries of Scotland and the V&A for £7.6m. The figure included £3m from the National Heritage Memorial Fund.

The Royal Opera House was given £78.5m of lottery money for a redevelopment in 1997 on top of its £20m-a-year grant. It was beset by financial problems but has since stabilised.

The Royal Armouries Museum in Leeds, opened in 1996, got a £20m government grant. By 1999 its losses were more than £10m and the government had to step in with another £1m a year.

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