Experts are appealing for the introduction of a similar system in Britain. At present, the UK Treasury offers tax concessions only after the owner has died. An attempt to introduce income tax changes to encourage donation were rejected in 2005 by the then Chancellor, Gordon Brown.

The renewed demands came after it was revealed that the Duke of Sutherland is hoping to sell two important Titian paintings, Diana and Acteon and Diana and Callisto, which have been on loan to the NGS since 1945.

The Duke has offered them to the nation at a discounted price of £100million, but they will be sold for up to £300million on the open market if half of the money cannot be found by a deadline of New Year’s Eve.

David Barrie, director of the Art Fund, a charity which raises money to buy paintings for public display, said: “We need a system of income tax reliefs to encourage donors to give art works to museums and galleries during their lifetime. If you could cultivate relationships with donors while they are alive, you could develop collections in a much more strategic way.”

In 2005 the cross-party Culture, Media and Sport Committee at Westminster recommended income tax changes to boost donations of art, but the Treasury turned down the proposal. “There is an endemic resistance in the Treasury to changes in the income tax system,” Mr Barrie said.

“There is a suspicion that it only benefits toffs. There are now many people with a couple of nice pieces that they cannot afford to give away completely, but would if they were incentivised to do so.”

Among those who support an income tax-based scheme are Sir Nicholas Serota, director of the Tate Gallery, Mark Woods, chairman of the Museums Council, and John Leighton, director of the NGS. They believe that potential philanthropists are too young to defer tax benefits until their death. Mr Leighton said: “There is potential for a whole new wave of philanthropy if there were better incentives for lifetime donations”.

Timesonline.co.uk

On Wednesday, a spider appeared on the side of a tower block in Liverpool. It didn’t move, it just sat there in all its glory: a huge mechanical construct of steel and wood, 20 feet across. Lurking. Waiting its moment. A harbinger of things to come.

The next day, in the vaulting spaces of the National Theatre’s largest rehearsal room, it was a horse that made its dramatic appearance.

The great and the good of Britain’s arts world were all assembled to mark the launch of the Cultural Olympiad – a four-year celebration of the richness and diversity of culture in this country that will take us up to London 2012.

NT director Nicholas Hytner, RSC boss Michael Boyd, Royal Ballet director Monica Mason and Nick Serota of the Tate were among those gathered to hear many inspiring words about galvanising talent, inspiring change and releasing potential through culture.

Suddenly the huge metal door of the scenery dock swung dramatically back and there stood a magnificent horse, pawing the ground, flexing its ears, twitching its tail.

All at once, the fine words meant something. Here, larger than life, was a concrete symbol of the bewitching power of art in the shape of one of the puppets used in the National Theatre’s award-winning War Horse. Everyone was entranced.

The National’s production and Liverpool’s spider stand at the pinnacle of a new kind of artistic endeavour in Britain.

One takes a much-loved children’s book, which tells of bravery and endurance amid the senseless carnage of the First World War, and transmutes it into pure theatrical gold; the stylised wood and metal puppets that populate the stage are made, by the skill of their operators and the power of the audience’s imagination, into flesh and blood participants in an unfolding saga.

Everyone who has been lucky enough to see the show is aware that they have been part of something special. There is barely a dry eye in the house.

But as the spider shows, this type of artistic alchemy is no longer confined indoors. It has broken out from stages and art galleries and taken to the streets. This weekend, the giant arachnid will start to creep across buildings as part of the city’s year as European Capital of Culture.

It was dreamt up by La Machine, “constructeurs et créateurs de spectacle vivant”, a company run by François Delarozière who was also the man behind The Sultan’s Elephant, a majestic beast that arrived in London out of nowhere in 2006.

As this gigantic model wove around the capital, enacting a fairy tale for grown-ups, people rang their friends to tell them to rush out to see it. One friend came across it, unexpectedly, and was soaked by a stream of water ejected from its mechanically operated trunk. “It was wonderful,” she said. “I’ll never forget it.”

The smile on her face is key to the effect of these imaginative public spectacles: people love seeing them, love the sense of taking part in something extraordinary.

Such works take many forms. Sometimes they are public, on the streets around us. Sometimes – as with War Horse or the RSC’s majestic performances of The Histories or the National Theatre of Scotland’s unforgettable Black Watch – they are events that people have chosen to see and paid to attend.

Sometimes they are freely available to all, but housed within conventional galleries. Tate Modern’s Unilever commission in the Turbine Hall has, notably, been the scene for many memorable events that have encouraged the kind of crowds which are normally associated with pop concerts or football matches.

There was Anish Kapoor’s sinister Marsyas, a red flayed horn that ran from one end of the gallery to the other, Louise Bourgeois’s brooding spiders, Carsten Höller’s whizzy slides, Doris Salcedo’s unsettling crack and, magically, Olafur Eliasson’s The Weather Project, which brought people in their thousands to lie beneath his murky, artificial sun, gazing at its yellow light.

Sitting among them, watching their reactions, it was impossible not to recognise that, in the 21st century, this kind of art represents a new kind of pageantry, a modern version of the mediaeval miracle plays that filled the streets with life and colour and invited all comers to attend. In just the same way, this is art that inspires people to come together in a collective moment of wonder and awe.

It is not, however, universally admired. The cynical still mock. If I had to date the moment when this country turned its eyes to the creation of these kind of all-embracing spectaculars, then it might be the day in 1994 that the sculptor Antony Gormley began to build the Angel of the North.

The doubters had a field day. Why, they asked, would anyone want to look at a big statue with wings in place of arms? Wasn’t the only result of building it that it was going to cause a lot of car crashes?

Yet here we are, 14 years later, and the Angel of the North is still there, loved and admired by local visitors and those who come from all over the world to see it.

And if anyone doubts the hold Gormley now has on the public consciousness, they have only to consider the brouhaha created two years ago when Sefton council tried to take down the statues he has placed on Crosby Beach, gazing out to sea. People respond to this kind of work just as the artist intended, and the bureaucrats and the pompous who are still sniffy about public art are missing the point.

I suspect that the reason such big spectaculars hold audiences in their embrace is the gesture they make towards something bigger than the humdrum and the everyday.

Sometimes the works themselves enact this: when Christo wraps a building in fabric or Eliasson turns a river green, they are actually intervening to alter the substance of the world around us and transform it into something magical. They make us – as Picasso claimed all art should – see things differently.

But sometimes, too, it is the power of the story, the suggestiveness of the narrative that is transforming. Liverpool’s steel and wood spider won’t just appear, it will move. And already, onlookers are beginning to construct tales around him: “I wouldn’t like to meet him on a dark night,” said one woman.

The horses in War Horse don’t just exist to impress, they are the means of propelling the audience to the heart of the action. This is art’s most primitive and valuable function. Like a story told around the fire, it exists to draw people together and help them to make a new kind of sense of their lives.

If the Cultural Olympiad can create the kind of inclusive, heart-lifting events that will make everyone who encounters them smile, and feel their existence has in some way been enriched and enlivened, then the £40 million it is planning to spend will be worth every penny.

Telegraph.co.uk