Britain's best-known architects have bailed out the Royal Academy of Arts after it failed to find a corporate sponsor for a key exhibition.

Lord Rogers of Riverside and Lord Foster of Thames Bank are among a group of Royal Academicians who stepped in to save the show about Andrea Palladio, the “first professional architect”, which opens next month.

Their action is the first clear evidence that the financial crisis in the City is threatening cultural institutions. The bubble around contemporary art prices has already burst.

Charles Saumarez Smith, chief executive of the Royal Academy, said: “It is going to bite into corporate sponsorship because the traditional sponsors were the big City institutions.”

Last month Mark Jones, director of the Victoria and Albert Museum and chairman of the National Museum Directors' Conference, said that businesses were spending perceptibly less on culture, making it harder for museums to find sponsorship and costing them thousands of pounds in lost corporate entertainment revenue.

Yesterday there were further warnings that a retreat from corporate spending would hit small and regional arts organisations particularly badly and reduce risk-taking in the arts.

Last year businesses invested £171million in the arts, up by more than 10 per cent on 2006 and accounting for nearly a third of all private giving. Public funding of the arts in the same period was £917million, distributed through Arts Council England and the lottery.

A survey carried out in the summer by Arts & Business, a non-profit consultancy that encourages corporate philanthropy, reported that 42 per cent of companies expected to reduce their arts sponsorship in the medium term.

Colin Tweedy, its chief executive, said last night: “If the corporate tap is turned off there will be a really damaging effect. A lot of public money [invested in the arts] is about enabling institutions to exist and do their core work. Private money is about enabling new things to happen and risks to be taken. We have simply got to take the arts to business in this recession.”

Among large institutions, the Royal Academy is unusually vulnerable to a downturn because it receives no government funding.

Andrea Palladio: His Life and Legacy will be the first London exhibition devoted to the Venetian architect in 30 years and celebrates the 500th anniversary of his birth. According to MaryAnne Stevens, the co-curator of the exhibition: “He matters because he is really the first professional architect and still one consistently revered by those contemporary architects who pay attention to the past.” In the early 18th century the 3rd Earl of Burlington remodelled the Piccadilly building that now houses the Royal Academy in the “Palladian” style.

Ms Stevens said: “We have been extremely lucky in the number of people who have come forward, including Norman Foster and Richard Rogers.”

The Royal Academy expects to end this financial year “modestly in the black”, thanks to two big shows: From Russia and the current Byzantium.

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