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Two charitable trusts established by the Sainsbury family have donated £25m to the British Museum in what is thought to be one of the biggest gifts to the arts for two decades.

The Linbury Trust, established by Conservative peer Lord Sainsbury of Preston Candover in the 1970s, will pay £12.5m to the museum over the next three years.

A further £12.5 million will come from the Monument Trust established by Lord Sainsbury's late brother Simon.

The money will go towards a major redevelopment of the London museum's facilities, helping fund a new World Conservation and Exhibitions Centre.

A spokeswoman for the museum described the donations as "incredibly generous". The gift was a vital part of a project which would "benefit future generations".

"This is an incredibly important project for the British Museum and has been planned for a long time," the spokeswoman added.

Donations from other private donors and a £22.5m government grant are also being used to fund the project, which will feature a conservation and science centre.

The centre, which will cost more than £125m, will include a gallery to house temporary collections which can compete with other UK and international institutions.

Planning permission for the centre was granted by Camden Council in October 2009.

The building will be made of glass and traditional stone, which the museum says will blend well with its Grade I listed surroundings.

The exhibition main space will be more than 1,000 sq m (10,764 sq ft), large enough to accommodate big temporary exhibitions such as the 2007 display of Chinese terracotta warriors.

Until now these have been held in the Reading Room, resulting in controversy because the historic surroundings were obscured.

New science laboratories will be built in the centre in which exhibits can be researched and restored.

State of the art machinery will be installed to study artefacts in forensic detail.

The gift comes at a time when many cultural organisations are facing a funding squeeze amid financial cutbacks.

In 1985, Lord Sainsbury and his brothers The Hon Simon Sainsbury and Sir Timothy Sainsbury financed the construction of the Sainsbury Wing at the National Gallery, which cost a total of about £50m and opened in 1991.

Lord Sainsbury's other donations have included £10m for a recent renovation of Oxford's Ashmolean Museum and money for the Linbury studio theatre at the Royal Opera House in Covent Garden.

Correction 14 September 2010: An earlier version of this story incorrectly stated that the full £25m had been donated by Lord Sainsbury.