A £125m gift of modern art is well and good, but where are we going to house it?

THE former art dealer who last week gave away more than £100 million of contemporary art to the National Galleries of Scotland has said he would like a new iconic building, similar to the Guggenheim in Bilbao, constructed to house his collection in Edinburgh.

Anthony d'Offay's collection, described as the most important in the UK, will be shared between the National Galleries of Scotland and the Tate in London. The current plan is to show the collection around the UK, from Orkney to Essex, in individual rooms devoted to each of the 50 artists represented.

But d'Offay said he also hopes a permanent space could be built in Scotland to ensure the country "continues to be creative".

D'Offay said his collection "needs a great building in Edinburgh" and referred to the Frank Gehry-designed museum in Bilbao as what Scotland should aim for.

"Think of the effect the Guggenheim in Bilbao has had on the Basque nation and those people," he said. "As a financial investment, it's been something extraordinary. But for the creativity of the Basque people, it's been crucial."

D'Offay said education and reaching young people were the motivations for his gift. "Creativity, I believe, is dependent on education and part of education is contemporary art," he said. "It is like food. You need it. You need it for your mind. You need it for your soul."

His collection, comprising 725 works by artists such as Andy Warhol, Damien Hirst, Diane Arbus, Joseph Beuys and Jeff Koons, was bought by the Scottish and UK governments, The Art Fund and National Heritage Memorial Fund, for £28m. It is valued at £125m.

At earlier stages of negotiations, the renovation of a site in Leith was mooted as a possible home for the collection. The Blue Shed, as it was known, quickly became impractical when the scale of the collection became apparent.

John Leighton, director of the National Galleries of Scotland, said there are no immediate plans to build a new space for modern art, with refurbishment of the National Portrait Gallery a priority. Yet he acknowledged a lack of space in Edinburgh and admitted some of D'Offay's collection could not be displayed in the current galleries because of their scale.

"We have these wonderful buildings, the Dean and the Gallery of Modern Art, but they also have their limitations," he said. "They're actually quite small and intimate, so you have things like a Jannis Kounellis installation that we physically couldn't show here.

He added: "You say iconic building, but what about an iconic campus? I would dearly love, at some stage, to link the two sites together so there's one campus, as opposed to two sites split by a very busy and hair-raising road."

A spokeswoman for the Scottish government said its priorities are investing in the existing national gallery space and refurbishing the Royal Museum.

"It is a key feature of the acquisition that the new works should be displayed around Scotland" she said. "Our first priority is to make sure this innovative aspect works."