Arts Council England has criticised a local council's planned sale of historic Chinese porcelain, a collection now worth millions of pounds half a century after being acquired for the nation.
About 24 vases, bowls and bottles from the collection, which dates from 2500BC to the 19th century, are now threatened with dispersal.
The funding body warns that such a move falls short of national museum standards. It could strip Croydon Museum of its official accreditation, a coveted status symbol in the sector.
The Tory-run Croydon council estimates that the sale could raise £13m, which it would put towards the planned £27m refurbishment of the Fairfield Halls, an 1960s arts complex in the town.
There is huge demand from the growing ranks of Chinese millionaires – one estimate in 2009 said their numbers had reached 450,000 – who are buying antiques from UK auction houses at an unprecedented rate.
In 2011, Bainbridges, a firm of auctioneers in West Ruislip, Middlesex, made international headlines for the £53m sale of an imperial Qianlong vase to an anonymous Chinese buyer, although it later struggled to recover the full purchase price.
The porcelain at Croydon Museum comes from a collection of about 200 pieces that includes vessels and figures of the highest quality, some of which dates from Neolithic times. The collection is kept in the museum's Riesco gallery, named after the local businessman and collector Raymond Riesco, who bequeathed the collection to Croydon in 1959.
In a letter to the council, the Arts Council expressed dismay over the disposal of museum objects which, it said, was being "driven primarily by financial considerations".
A Croydon council spokesman defended the sale, saying the proceeds would be invested in Fairfield Halls arts centre, where the facilities were not "up to scratch for modern touring performances".
The spokesman added: "There is already a commitment to spend about £27m on that project over the next five years … by selling a small number of pieces from the Riesco collection we can offset the borrowing requirement that would have existed to spend that £27m … it's purely a prudent way of taking one capital cultural asset and putting it into another. The overall saving to local taxpayers as a result of that, based on the offset of interest payment on the money we would have to borrow to redo the halls, is between £750,000 and £1m a year."
Maurice Davies, policy head of the Museums Association, which represents the nation's museums and galleries, said stripping Croydon Museum of its accreditation could affect its status.
"Symbolically, and in terms of the museum's position in the sector, [losing accreditation] is really serious. It's ostracising the museum. The public have a lot of trust in museums and part of that trust is that museums will keep important collections for the long-term … this won't only damage the reputation of Croydon Museum, it threatens to damage the reputation of museums more widely."