The number of works sold at auctions tumbled, along with the average price.

"The art market has had a tough season," the industry publication the Art Newspaper said. "And while some stellar prices have been achieved, this has tended to obscure a very real weakness in the middle market."

Global sales fell from �1.85bn before the 11 September terror attacks to �1.62bn in their wake.

Collapsing stock exchanges and high international tension were also blamed for the drop.

Million-pound club

Membership of the so-called million-pound picture club is also on the decline.

Despite the high profile �49.5m sale in July of a Rubens, this year it boasted a membership of just 186 works, compared to 213 paintings in 2000-2001.

Thirteen Picasso paintings fetched more than �1m

The club remains dominated by Impressionist and Modern artists - 13 of the year's most expensive works were painted by Picasso.

Warhol and Matisse were close behind with 12 and 11 respectively.

Grand Masters accounted for just 18 of the big ticket items.

The Art Newspaper said the low figure "underlines the problem of supply in the market".

The world's top auction venue is Christie's New York, which sold $414m (�265m) worth of art, closely followed by Sotheby's New York at $409m (�262m).

The figures were compiled by the Art Sales Index for the period from 1 August 2001 to 31 July 2002.