Serota gets a job for life at the Tate – but how come No 10 wasn't told?

Sir Nicholas Serota, the formidable and contentious director of the Tate galleries whose contract was about to expire, has been made a "permanent employee" to stand at the helm of the galleries indefinitely, The Independent has learnt.

The decision will be welcomed by supporters, but Sir Nicholas and the Tate trustees will face vociferous protests from opponents of his 20-year reign. That tenure has been dramatic: from the healthy expansion of the galleries; noisy promotion of modern art and the controversial Turner Prize; to breaking charity law by buying a work by a Tate trustee.

Sir Nicholas, 62, the son of a Labour health minister under Harold Wilson, was appointed in 1988 on a seven-year contract, renewed in 1995 and 2002. Concerns were expressed this year that trustees hoped to push his contract renewal through "on the quiet", with no other candidate put up for the public post.

A Tate spokeswoman said the decision had been made at a trustees' meeting on 9 July, and the change made to a permanent contract was in line with employment law. "The trustees discussed the issue of the director's contract and terms of employment, in a separate session for trustees only, on 21 May, and were asked to consider the terms in order that a decision could be reported to the board on 9 July," the spokeswoman said.

"As part of these discussions it was noted that the director's current contract had been awarded on a fixed-term basis, in line at that time with usual practice for national museum directors.

"However ... there have been major changes in UK employment law meaning the director in fact should be treated as a permanent employee ... and the contract expiry date of 31 August had no binding effect."

A spokesman at No 10 claimed Sir Nicholas's reappointment did not require the approval of the Prime Minister – contradicting the Museums and Galleries Act 1992, which states: "There shall be a Director of the Tate Gallery who shall be appointed by the Board with the approval of the Prime Minister."

Thirty minutes later, a source from the Department for Culture, Media and Sport rang to confirm that the decision did, in fact, require prime ministerial approval. He added that the department "does not know anything about this as far as I'm aware".

In April, a petition was posted on the No 10 website, calling for Gordon Brown to veto Sir Nicholas' reappointment. Signatories included the art historian Bevis Hillier and the Private Eye journalist Barry Fantoni.

Sir Nicholas' governance of the Tate has had notable successes: Tate Modern was built and attracts masses of visitors; the Turner Prize generates publicity; shrewd exhibition choices at Tate Modern's Turbine Hall have been commended across the world. He has become an international figure of note, recognised as a champion of contemporary art. The Tate Modern hopes to build an ambitious £215m extension, his brainchild.

But criticism continues. Bevis Hillier, who signed the anti-Serota petition, said yesterday that Sir Nicholas had done more harm than good on the arts scene.

"It's very sad," said Mr Hillier. "I have nothing against him but he seems sincerely misguided, and sincerely sold on all that rubbish that the likes of Tracey Emin and Damien Hirst produce consisting of filthy beds and misspelt words. There is a conspiracy within the art world to commend this sort of work between artists, art dealers and critics, and I think Nicholas Serota stands at the top of his unspoken conspiracy.

"Yes, he has the green fingers to keep interesting people in the Tate Modern and is an important figure in the art world. But this is why we wanted him toppled."

Two years ago, the Tate was accused of breaking charity law by buying for £600,000 an installation by Chris Ofili, who was a Tate trustee at the time. Earlier this year, it stood accused of boosting trustees' careers after buying paintings by members of its board, including the Turner Prize winner Jeremy Deller.

Mr Hillier said he felt Sir Nicholas must be accountable. "Under his umbrella, there have been a number of real scandals. When there are scandals in big institutions, the person at the top takes the rap or considers his position," he said.