A THREAT to the structure of the Scottish Arts Council and its

relationship with the Government was foreshadowed by Ministers

yesterday.

National Heritage Secretary Peter Brooke outlined in the Commons a

series of proposals which indicate that the Government is to take a more

interventionist line with the Arts Council in England.

On the face of it, these do not affect Scotland but, under part of the

''Taking Stock'' exercise, the Scottish Office will assume direct

responsibility for the Scottish Arts Council from next year -- and the

same conditions are set to apply.

Scottish Secretary Ian Lang said yesterday: ''The matters covered in

Mr Brooke's statement on the future of the Arts Council are issues which

will figure in the preliminary discussions I am having with the Scottish

Arts Council in the period leading up to the transfer of responsibility

for the council to me, which takes place next April.''

Mr Brooke said he was reaffirming his commitment to the ''arm's length

principle'' for arts funding, under which it was for the Arts Council to

steer the general direction of artistic policy and to decide the

allocation of resources.

However, he added that he would be ''exploring ways in which the

council's accountability could be improved.''

The Minister has asked the Arts Council to conduct a review of the

entire range of its activities over the next two to three months and, in

addition, has asked it assume an illustrative benchmark reduction of 10%

in gross administration costs. Mr Brooke also wants to reduce the

council's membership from 20 to 16.

He told the House that his conclusions followed a study by Price

Waterhouse into the structure of the Arts Council of Great Britain last

year, and sought to persuade MPs that the Government was intent on

retaining artistic freedom.

However, the Minister said: ''With that degree of independence for the

Arts Council in the use of taxpayers' money comes also the

responsibility for explaining its decisions fully and clearly, not least

to this House. I shall be exploring with the chairman ways in which

current levels of accountability might be improved.''

Labour's spokesman, Mrs Ann Clwyd, said the Arts Council had done a

notable job over the last 50 years and should not be allowed to suffer a

''slow death by a thousand cuts.'' Actress Glenda Jackson, Labour MP for

Hampstead and Highgate, said: ''How can the Government's stated aims of

presenting the best of our arts to the most of our people possibly be

carried out if the Arts Council proposes to close 10 regional theatres?

''If we have no regional theatres, we will never have any London

theatres.''

The Scottish Arts Council last night said it had received no

indication from either the Scottish Office or the Department of National

Heritage to indicate that its operations were to be reviewed.

''We are always eager to minimise overheads in order to maximise

grants to arts organisations and we have kept down our overheads to 8.2%

of

total spending, which is considerably better than any of the regional

arts boards in England,'' a spokesman said.

''Most people will acknowledge that we have a good record.''

The Arts Council in England welcomed a ''victory for common sense''

after Mr Brooke rejected proposals to cut the jobs of dozens of its

staff.

Arts Council secretary-general Anthony Everitt said: ''It's good news

for the Arst Council and the arts community. Mr Brooke has listened to

the many voices in the arts world which have been raised in anxiety

about one aspect or another of the Price Waterhouse recommendations.''