Charles Saatchi, the advertising agency millionaire, has paid a record price for a painting by Lucian Freud, the British artist. The purchase of Two Men in the Studio for dollars 2m ( pounds 1.26m) was con-firmed yesterday by Mr Freud's dealer, James Kirkman.

The news comes during a bout of speculation about the future of the Saatchi Collection, the world's largest and finest of contemporary art. The news that Mr Saatchi has sold between 70 and 100 paintings from his collection over the past six months (reported in The Independent, 14 October) has been seen by many as a signal of a diminishing commitment to a collection conservatively valued at dollars 250m.

But a source close to Mr Saatchi said yesterday that the purchase of the Freud painting was firm evi-dence of his continuing will to collect, and of his new admiration for British art.

The New York art world continues to buzz with rumours of major sales from the Saatchi Collection. Mr Saatchi, according to the most recent and persistent rumour, was said to have accepted dollars 75m for a large segment of his collection from Larry Gagosian, a New York dealer who is also Mr Saatchi's agent, and Thomas Amman, a Zurich dealer. 'If that is so,' said one prominent figure in the New York art world last week, 'it would be positive confirmation that we are seeing the end of the Saatchi Collection.'

But yesterday Mr Amman denied that he had purchased any works from the Saatchi Collection, and a source extremely close to Mr Saatchi categorically denied the rumour.

'I think I know how the story started,' the source said. 'Within the last fortnight an agent acting on behalf of a wealthy Japanese collector approached Saatchi's agent in New York, Larry Gagosian, and offered approximately dollars...

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