Visitor numbers at the UK's best-known group of art galleries, the Tate, have slumped after the initial rush to go to the Tate Modern.

Attendance figures for the Tate's four galleries - including the Tate Modern and Tate Britain in London - fell by more than 1.2 million in the 12 months to the end of March 2002.

We went way over expectations immediately - it was the complete novelty of the Tate Modern

Spokeswoman Tate

Tate director Nicholas Serota has warned that there could be a shortfall of £1.5m in the organisation's budget by 2003-2004.

"We will be obliged to make reductions in our programmes," he said.

A drop in visitors at the Tate Modern, the gallery in an old power station that was opened with great fanfare in May 2000, accounted for the slump.

Some 5.25 million visitors went to the gallery in its first year, but that figure fell to 3.6 million in the following 12 months.

The Tate Britain has recently undergone refurbishment

The dip comes despite the popularity of big-name shows like Matisse Picasso, which attracted 500,000 paying art-lovers in three months.

A high-profile Andy Warhol show at the start of 2002 was seen by almost 220,000 people in two months.

A Tate spokeswoman said the new figures signalled a "natural levelling-off".

"We went way over expectations immediately - we got five million in the first year, and we never expected to get that. It was the complete novelty of the Tate Modern," she said.

"It's really still fantastic news that Tate Modern is getting so many figures but obviously the novelty wears off."

The drop also comes despite the opening of five new exhibition rooms at its sister gallery, the Tate Britain, which were opened so its collection of British art could be displayed in chronological order.

Missing out

There is currently no deficit in the Tate's finances, and Mr Serota said he was confident the government would make up the potential £1.5m shortfall with an increase in "grant-in-aid".

He said the tight financial situation meant the galleries were missing out on major purchases for their collections.

The Tate had fallen just £500,000 short of buying Sir Joshua Reynolds portrait of the 18th Century Tahitian visitor Omai, which would have cost them about half of the £10m it later went for at auction, he said.

The galleries also missed out on a Georges Braque that had been hanging on the Tate's walls for nearly five years on loan before being sold to another gallery.

"The limitation on funding - which is acute - inhibits our activity in every possible way," Mr Serota added.

Vulnerable

Tate chairman David Verey said the post-11 September downturn could potentially affect corporate income.

"We have earned a higher proportion of income from the private sector than any other museum... but it leaves us vulnerable to economic downturn.

"The paucity of government funds available for the purchase of works of art has resulted in some lost opportunities."

Tate also runs galleries in Liverpool and St Ives, Cornwall.

An exhibition of sculptures by Antony Gormley at the St Ives venue drew 100,000 visitors in 10 weeks.