The British Museum is hoping to clear its deficit, currently estimated at more than �6m, by the sale of one of its central London buildings.

The move, previously vetoed by the Treasury, may be allowed after indications that the Department for Culture Media and Sport will allow a relaxation some of the museum's accounting rules.

Punishing deficits is not government policy

DCMS spokesman

The British Museum, in Bloomsbury, receives �36m in government grants and also raises money from its gift shop, book shop, restaurants and donations.

But the collection has accumulated a �6m deficit after major building works and a decline in expected income.

The museum's new director, Neil MacGregor, is understood to have lobbied Culture Secretary Tessa Jowell directly over the funding issue.

MacGregor has appealed to the Culture Secretary directly over funding

The outcome of negotiations with the department will be known after Ms Jowell's department publishes its spending plans in two weeks' time.

The Sunday Times reported that the Treasury would not allow the museum an easy way out of its funding crisis - for fear of being seen to "reward incompetence".

But a DCMS spokesman told BBC News Online that "punishing deficits is not government policy".

"After all the British Museum has a new director and we have high hopes for him," said the spokesman.

"The Treasury have allowed us to relax some of the rules on the receipts of the sale of the building in New Oxford Street, and that should help clear the deficit over the next couple of years."

The building, a former post office just a couple of hundred yards from the museum's main site, is reportedly worth some �35m. It has been derelict for some years.

But the DCMS spokesman said the move would be unlikely to stave off threatened redundancies.

"They're still going to have to put their own house in order," he said.

A British Museum spokesman said that the collection would not comment on funding until the DCMS's spending plans were published.