Labour peer Lord Puttnam and Sir Christopher Ondaatje are among those appointed to a new advisory group to review how government can support regional and national museums more effectively.

The move follows the publication of a consultation paper by the Treasury and Department for Culture, Media and Sport, which examines the tax and funding arrangements for museums and galleries and the effect they have upon acquiring new items for display.

Puttnam has recently chaired the joint committee on the Communications Bill, while Ondaatje is a former banker who donated £2 million to the Labour Party in January 2001.

However, the group itself will be chaired by Sir Nicholas Goodison, former chairman of the National Art Collections Fund.

"Acquisitions refresh and enrich the public collections, which are a crucial part of our cultural life," he said.

"I greatly welcome the government's wish to look at these subjects. I look forward to hearing everyone's views."

Chief secretary to the Treasury, Paul Boateng, backed the move.

"The government recognises the importance of ensuring that important works of art stay in the country so that we can all enjoy and learn from them," he said.

"We already work closely with the arts world to ensure that where possible museums and galleries are able to display precious works of art.

"The review aims to ensure that the support on offer is practical, well-targeted and value for money."

The move was also welcomed by Estelle Morris, who recently re-joined the frontbench as arts minister.

"DCMS is working to make progress and is looking forward to finding some practical solutions to prevent the loss of cultural objects that are important to this country," she said.