THEY are axing jobs, taxing the dead, and making multi-million pound cutbacks.

Yet today the Daily Echo can reveal how Southampton City Council is prepared to go into debt rather than sell off prized artwork to fund a multimillion pound Sea City Museum.

The controversial great art sale has been dropped as a funding source for the museum.

It means much of Southampton City Council’s largely hidden £180m collection will remain languishing in the dark while the authority battles to raise the funds to pay for somewhere to show it off.

Councillors last night approved plans to raise the £15m needed to build the museum after agreeing a council tax rise of 2.5 per cent in a budget package that included axing 120 jobs, and making £8m of cutbacks.

Leisure and heritage boss councillor John Hannides admitted that they had backtracked on plans to sell off parts of the 3,700- piece collection to pay for the museum.

“The financial planning for the heritage centre does not depend on the sale of art.

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“The assumption in our fundraising is that there will be no proceeds from the sale of art.”

Confidential documents obtained by the Daily Echo reveal finance chiefs are now banking on investment from other organisations and are in talks with “high net worth” individuals to help fund the City Council’s £5m contribution. They also plan to sell off any “surplus” land or other assets.

And if they come up short ruling Tories plan to borrow cash to make sure the museum can be built in time for the centenary anniversary of the sinking of Titanic in April 2012.

Another £5m is set to come from a separate fundraising and sponsorship drive, while a decision is expected next month on a £4.6m grant from the Heritage Lottery Fund (HLF).

The decision to sell a painting by British artist Sir Alfred Munnings and sculpture by French master Auguste Rodin sparked outrage in the art world and among local campaigners.

At the time council leader Alec Samuels issued the protestors with an ultimatum: “If we don’t sell some paintings we don’t get a heritage centre. “ Conservatives at the time also dismissed Labour proposals to borrow the money as a “reckless plan”

claiming it would lead to cuts in frontline services or higher council tax to meet repayments.

But Cllr Hannides insisted any borrowing would be for upfront short-term cashflow purposes and could not be otherwise used to pay for council services.

The controversial art sale was “suspended” in November to look for “alternative sources of funding”

amid fears the HLF bid could be in jeopardy.

Cllr Hannides said the sale would always have been a last resort and that it was the “only option at the time”

as various cultural projects and Government funding collapsed.

Labour heritage spokesman councillor Derek Burke accused Tories of failing to listen to objections and wasting valuable time, while admitting they may need to borrow after all.

He said: “The art sale is dead and buried. We asked them what was plan B. They said they didn’t have one. This is now plan C. It’s a climbdown.”

Only 200 works can be shown in the City Art Gallery at any one time and some works have scarcely seen the light of day in years.

The Sea City Museum will feature a cruise-liner inspired extension to the west wing of the Civic Centre, known as the pavilion.

The old magistrates’ courts will be transformed into two permanent exhibitions, entitled “Southampton’s Titanic Story” and “Gateway to the World”.