Bodelwyddan Castle's portrait gallery exhibition to close
Bodelwyddan Castle is set to close its exhibition of 130 paintings from the National Portrait Gallery, with seven staff being made redundant.
The decision comes as Denbighshire council, which owns the castle, cuts its £144,000 annual grant to the trust that runs it from next year.
Director of the trust Kevin Mason said members were "somewhat aghast" by the decision.
The council blamed a "difficult financial environment".
Mr Mason said part of the castle is leased by Warner Leisure Hotels and its annual rent of £80,000 will no longer go to the trust either.
"We are somewhat aghast by the decision of the county council," said Mr Mason.
"We have done a really good job of using the money.
"I don't think you would find many national museums in London prepared to do a deal with a museum in north Wales now."
The cuts mean seven of the trust's 13 staff, including Mr Mason, will be made redundant, with the pictures returned to the National Portrait Gallery (NPG) by the end of April.
The portraits, which have been on display since 1988, will be taken down next Monday but the cafe and shop on the site will remain open.
The castle's trust is about to open a new World War One trench recreation experience for visitors, which was paid for by a grant of £184,000 from the Ministry of Defence.
Mr Mason said it has its own collection of 350 paintings which will now have to be hung on the walls to replace those going back to the NPG.
In a statement, the NPG said it "regrets" the announcement.
It added the castle has been home to displays of 19th Century works since 1988 and won the Museum of the Year Award in 1989.
A spokesman for Denbighshire council said: "The difficult financial environment within the public sector over recent years has meant that the council has had to review all expenditure, and we have decided that we cannot continue to justify this subsidy to Bodelwyddan Castle Trust.
"We have been discussing this situation with the trust for some time, and subsequently made the decision to delay the removal of the subsidy until April 2018 to allow additional time for the trust to plan its future financial arrangements."