A source at the MLA said staff had been told that they will have to in effect apply for their own jobs and, if there are no equivalent posts available, they may be made redundant.

Alan Leighton, the national secretary of the Prospect trade union that represents the majority of staff at the MLA, said he was disappointed that they were in this position. 'Between DCMS and management, they have got a lot to answer for,' he said. He added that morale was very low and uncertainty about the proposed move to Birmingham in 2008 didn't help. It is understood that the move may now be postponed until 2010.

Chris Batt, the chief executive of the MLA, refused to comment on the number of redundancies. He said: 'At the moment, we are dealing with issues to do with individuals and I can't go into details.' He added the process was about getting the structure right rather than making savings. 'We have not been required to make savings that we have to return to DCMS. We want to ensure that we have the right people in posts to deliver what we want.'

Mark Taylor, the director of the Museums Association, said he was concerned that the loss of a number of policy posts would inhibit the MLA from doing what it was set up to do. 'We should remember that it was trumpeted as a new 'strategic body' to replace the Museums and Galleries Commission, which was too "executive".' He added that he feared the MLA was going the same way.

As part of the reorganisation, a new partnership between the MLA and the nine regional agencies came into being last month. The partnership will operate to a single corporate plan and identity. From this month, all the regional agencies will be known as MLA followed by the name of the region. So, for example, the Yorkshire Museums, Libraries and Archives Council will become MLA Yorkshire.

The national organisation will also have a slight change of image with its interlocking circles now coloured blue. 'Its ensuring that there is a clear brand for the whole of the partnership,' said Batt. 'We are working towards creating a series of single strategic documents relating to particular areas of work rather than having different strategies in different regions.'

Asked why he thought the MLA had got into this situation, Taylor said it was a combination of mismanagement, bad planning and political whim. 'The present management are not to blame for most of this.

The MLA was politically motivated, inadequately funded, unplanned and badly managed from the very beginning.' Taylor said that the Department for Culture, Media and Sport should take the lion's share of blame. 'They never clarified the MLA's role, never properly backed it and then never let them get on with it.'

Sharon Heal