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The government's Museums, Libraries and Archives Council (MLA) has removed Bury Council's accredited museum status after it sold a Riverbank for �1.25m.

The Greater Manchester authority will now have limited funding options and will be ineligible for some grants.

The council says its is "extremely upset" at the MLA's decision.

The painting was sold at an auction last month to help plug a financial deficit.

The council said the money "will help secure the future of frontline services".

'Cultural deficit'

The MLA made its decision on Friday, saying that "standards for the disposal of items from the collection of the Art Gallery and Museum were no longer met".

Chris Batt, MLA chief executive, said: "The Accreditation panel has made a unanimous decision to remove Bury Museum's registered status.

"The rules of the scheme are in place essentially to maintain and preserve our country's heritage, therefore breaking those rules not only affects future funding for the museum, but creates a cultural deficit for the people of Bury."

The council said frontline services were under threat

The painting was bought for �175 in 1951. LS Lowry was involved in Bury Art Society.

Bury Council leader Wayne Campbell said: "We are disappointed that MLA has made this decision but our alternatives were very limited, when it came down to a decision between key services for the community or a work of art we had to make a very tough decision.

"People must come first."

The council resigned from the Museum Association when it too threatened it with expulsion for the sale.

Chief executive Mark Sanders said the resignation was because the MA's president caused "resentment" by accusing the council of "cultural vandalism".

He said that its refunded fee has been used to buy a piece of contemporary art.

The MA has yet to decide to retrospectively expel the council, despite its resignation.