The British Council might "disappear" within a decade, hurting the UK's worldwide position and leaving an international vacuum to be filled by Russia and China unless the government steps to rescue it, according to the council's leader.

Scott McDonald, the British Council's chief executive, told The Guardian that he was looking at £250 million in budget cutbacks, the layoff of hundreds of employees, and the end of the council's presence in up to 40 nations.

McDonald stated that without government financial assurances, “I think we’d be in real danger of disappearing, probably over a period of a decade. And I don’t think I’m saying this just for headlines, I think it’s really true.”

The financial crisis would jeopardize hundreds of millions of pounds in economic activity created by the council's operations, undermining Britain's soft power and cultural influence, with ramifications for diplomacy, tourism, and foreign student recruitment.

The council, which gets 85% of its approximately £1 billion yearly revenue via commercial activities such as language lessons, has a presence in 100 countries but is considering discontinuing operations in 30 to 40 of them.

Calling it "enormously detrimental", Mcdonald expressed fears over the way this "leaves a vacuum" that would "open up for Putin’s Russia to move into these places to teach language and promote culture and capture the minds of young people."

He added that China was recruiting students worldwide through scholarships and other forms of help. In contrast, UK higher education faced greater competition for brilliant students and billions of pounds in overseas tuition costs.

The council's financial issues stem from a £200 million Covid-era loan from the government, which has high commercial interest rates and requires yearly reauthorization. This creates a risk of insolvency unless renewed each year.

McDonald has called for the government to adjust the loan to more manageable terms, ideally with a 25-year repayment period and lower interest rates. He emphasized that, under more reasonable terms, they would commit to paying it back in full.

He stated that he offered the government the council's £200 million art collection, which included pieces by Barbara Hepworth, Steve McQueen, David Hockney, and Rachel Whiteread, in return for the debt being written off but was unsuccessful.

The council would rather not sell any of its collection but may be left with no choice.

“If we get better terms on this loan, and we get some extra funding, I think we should be able to prevent significant art sales. If we get none of that, we have a £200m loan hanging over our heads that’s going to be due in another 12 months,” McDonald divulged.