It is unusual for an ACE chair to depart after one term. Both previous incumbents, Sir Christopher Frayling and Sir Gerry Robinson, were invited to extend their contracts. Internally, Forgan's departure has come as a surprise, since she was widely expected to see through a restructuring of ACE, which has already begun and, under the last government funding agreement, obliges the body to cut its running costs by 50% by the end of March 2015.

When the coalition was formed in 2010, there was speculation in some quarters that Forgan, who has been perceived as left-of-centre politically and who was appointed under the Labour administration, might not survive under the new regime. However, relations between Forgan and Hunt have been, openly at least, warm.

But Hunt has received criticism from the right for being too accommodating of Forgan, and for failing to create a cultural identity for the new government, distinct from the values and people of the old guard. One senior figure in the arts world, who preferred not to be named, said: "This move is totally political. It is nothing more or less than political."

Sir Nicholas Serota, director of Tate, said: "I am deeply disappointed that Liz Forgan is not being renewed as chair of the Arts Council. She has led the council with real verve and conviction through a period in which cuts to arts spending could have resulted in the loss of major parts of our cultural landscape."