THE National Gallery, which is facing a struggle to hang on to some of its notable works of art, has turned to a trusted former employee to be its next director.

Nicholas Penny, an authority on Renaissance art, worked at the gallery in Trafalgar Square from 1990 to 2002 before leaving for Washington.

In 1991, Penny, then curator of Renaissance painting at the National, identified a painting in a corridor at Alnwick castle in Northumberland as Raphael’s Madonna of the Pinks. Although it represented a professional triumph for Penny, it eventually backfired on the National.

In 2002 the Duke of Northumberland, who had loaned the Raphael to the gallery, decided he wanted to sell the painting for £30m.

The National fought a lengthy and ultimately successful campaign to keep it in Britain but it had to pay £21m for the painting.

It raised nearly £10m, the lottery put up a further £11m and the balance was made up by tax relief.

The museum now faces an almost constant threat that some of its 2,000 works could be sold by their loaners, who are eager to cash in on high market prices.

Ironically, the money spent on the Raphael means there is less available for other purchases.

Penny, 58, will return to England in the spring to run the gallery as it grapples with the dilemma about whether to spend millions on a new extension for much needed exhibition space, and how to eke out diminishing funds for new purchases.

The National Gallery of Art in Washington, where he has worked for the past five years, has much larger budgets. One of his key tasks in Britain will be to persuade potential private donors and business people to top up the annual income the gallery gets from government.

For Penny, his selection is third time lucky as he has twice previously applied for the post. He beat off challenges from Gabriele Finaldi, deputy director of the Prado in Madrid, and Stephen Deuchar, director of Tate Britain, to land the plum job. It became vacant after Charles Saumarez Smith quit last spring to move to the Royal Academy.

Founded in 1824, the National has one of the greatest collections of western art in the world. But in recent years it has been financially squeezed.

Only three months ago the gallery said it hoped to save five Poussin Sacraments paintings, valued at about £100m and on loan to the gallery by the Duke of Rutland. But it is now thought it will be unable to afford to keep them, particularly as lottery money has almost dried up.

The National has also accepted that it cannot keep its Rubens’s “sketch” – a preparatory version oil of the ceiling for the Banqueting House, which it also has on loan. Tate Britain is trying to raise the money to purchase it.

Penny will also have a new chairman of his trustees within months of arriving. The lawyer, Peter Scott, who has been a trustee since 2000, leaves in the summer. Three other trustees also need replacing.

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