INVERLEITH House, the pioneering contemporary art gallery in Edinburgh’s Botanic Gardens is to close, after bosses said they could no longer tolerate the “inevitable financial risks”.

Artists reacted with dismay to the news that the 30-year-old venue will be no more.

In a statement the Royal Botanic Gardens Edinburgh (RBGE), said they had to focus their efforts on their core mission to “explore, conserve and explain the world of plants for a better future” and they had to be “pragmatic about the overall diversity of its wider commitments.”

RBGE went on to say: “Through this change the organisation will remove the various inevitable financial risks attached to running a high-profile gallery. It will also free up resources to concentrate more fully on its scientific and horticultural research and conservation work and provide greater scope to encourage public engagement with the environment.”

Two years ago, Inverleith House failed in a bid for three-year regular funding from Creative Scotland. Between 1994 and 2016, the gallery has been supported by the quango and its predecessor, the Scottish Arts Council, to the tune of £1.5m,including approximately £80,000 annual funding for exhibitions, plus a capital award of £148,453 towards the cost of up-grading the provision of visitor facilities.

In a statement Creative Scotland said they were disappointed by the decision to close the gallery: “We understand the financial pressures that RBGE are under, like other publicly funded organisations. However, we would have hoped that the value that Inverleith House brings to the gardens, to the public, and to Scotland as a space for art and creativity could have been better recognised and result in a different decision.”

Inverleith House, and its curator Paul Nesbitt have had a strong reputation in Scotland’s contemporary arts scene. It has presented more exhibitions by Turner Prize winners and nominees than any other gallery in the UK, with the exception of the Tate Gallery in London.

The gallery’s current exhibition, I still believe in miracles... closes this weekend on Sunday. It is uncertain what will happen to the building immediately afterwards.

“Terrible news that Inverleith House is to close. The harsh financial reality for artists, cultural workers and organisations needs to be addressed,” said the Scottish Contemporary Artists Network.

David Shrigley tweeted: “Very disappointing news. We have lost an important venue”.

The news came on the day Creative Scotland published the findings of their visual arts sector review. There were, the report says, things to be positive about. Around 23,000 pupils study art and design, making it the most popular arts subject in Scotland’s secondary schools. Arts organisations in Creative Scotland’s portfolio of Regularly Funded Organisations also recorded more than 1.2 million attendances in 2014/15.”

Amanda Catto, the body’s Head of Visual Arts, said there was still work to be done on keeping the sector strong: “However, the study raises concerns about the sustainability of careers in the sector and how best to maintain the quality, ambition and reach of their work into the future – with challenges being faced by artists and other freelance professionals working across the country.

“We want Scotland to maintain its position as a recognised international centre of excellence for the visual arts.

“This review identifies a need for the sector to be enabled to maintain and grow the resources required to sustain its work. Building resilience will require high levels of creativity and ambition.”