More than 300 museums and galleries took part in the study

Of the institutions surveyed, 60% said they were unable to allocate money for purchasing new items last year.

The Art Fund has called on the government to adopt a "more positive" approach to funding collections.

But the Department for Culture, Media and Sport (DCMS) said it had increased investment by 43% since 1997.

It is time the government threw away the political correctness agenda and bought a few more pictures Sir Patrick Cormack MP

The report said 70% of museums relied on gifts for new acquisitions, and the majority of those were of little or no monetary value.

The Art Fund director David Barrie said: "Collections are at the heart of museums - they must be continually enriched and renewed to keep our museums vibrant and appealing."

Sir Patrick Cormack MP, chairman of the All-Party Parliamentary Arts and Heritage Group, said: "This is a very real crisis that museums and galleries face."

There is more to a coherent cultural policy than simply funding acquisitions Department for Culture, Media and Sport

The UK is losing works of art to overseas galleries because government funding is earmarked for making museums "more user-friendly", rather than new purchases. he said.

"It is time the government threw away the political correctness agenda and bought a few more pictures."

The DCMS defended its spending plans, saying: "There is more to a coherent cultural policy than simply funding acquisitions.