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Culture secretary Jeremy Hunt has asked current chair of the Arts Council Dame Liz Forgan to step down and has launched a search for a replacement to lead the sector through a "challenging period".
Forgan, who has been in her current position since February 2009, will stay on until the end of January 2013, and recruitment for a new chair will begin after Easter.
Hunt said: "The next chair of the Arts Council will have to steer the organisation and the sector through another challenging period, in particular in increasing the amount of private giving to the arts and encourage the sector to make the most of technological changes."
He added: "Dame Liz Forgan has been an outstanding Arts Council chair who has made a huge contribution to the arts in this country. I am very grateful to her for all her hard work, advice and support, and wish her every success in her future endeavours."
Arts Council chief executive Alan Davey called Forgan an "outstanding" chair who would be much missed. "When Liz departs at the end of her four year term in January, she will leave behind a transformed Arts Council – one whose greater transparency and efficiency has been recognised in its being entrusted with a wider remit that includes museums, libraries and cultural education alongside the arts. And that is due, in no small part, to her stewardship," he said.
The Sunday Times reports that former Tory cabinet minister Michael Portillo and TV executive and importer of the "Big Brother" format Peter Bazalgette are frontrunners for the post. The paper also suggests that Veronica Wadley, former editor of the London Evening Standard, may also be in the running.