She said the government was "working closely" with the art school, the University of NSW and the University of Sydney to ensure a high level of fine arts education is maintained, but did not disclose how this would be achieved. Back to the future: Students from the National Art School staged a protest against a proposed merger outside the NSW Parliament in 2006. Credit:Natasha Paes "Property NSW is currently negotiating a license agreement with the NAS to continue to occupy the Old Darlinghurst Gaol site," she added. NAS's future was thrown into further doubt after the resignation of the institution's well-regarded director Michael Snelling, which he conceded was "unfortunate timing". Snelling said the NSW government would make a "political decision" about the future of the art school as lengthy merger talks, revealed by Fairfax Media last year, continue.

Williams said the appointment of a new director was a matter for the NAS board, which is led by banker Nicholas Johnson. The University of Sydney announced in June its Sydney College of the Arts at Callan Park in Rozelle would be shut down and merged with UNSW Art and Design (formerly the College of Fine Arts). The SCA has extensive art-making facilities at the site, including glassworks, which UNSW lacks at its art school in Paddington. UNSW spokeswoman Denise Knight said: "Although we do not teach glass as a subject, our ongoing discussions will focus on how the needs of all students wishing to transfer to UNSW Art and Design may be best met." She said diversity and choice for students was a focal point of the merger talks with NAS and the NSW government.

NAS students are lobbying to have the institution remain independent and in Darlinghurst and directly funded by the federal government. An email sent on Tuesday by the Student Representative Council warns students that a merger with UNSW "will threaten your experience at NAS". "This will not just affect your time at NAS; it also has the potential to affect your career as a practicing artist," the email said. First-year student Oliver Lardner said the attitude of the NSW government towards the art school is "very disheartening".

"If the city, which is currently covered head-to-toe with flags for the Art Gallery of NSW and Archibald Prize can't protect us, who will?" he asked. "There are two current students in the Archibald and seven or so alumni. Where does [Premier Mike] Baird think we come from?" Lardner, who is studying painting and sculpture, said students are frustrated that the art school's success in boosting enrolment numbers and high satisfaction ratings are not recognised. "Student studios are expensive but they exist because they work," he said. "We produce more artists of international acclaim than anywhere else and NSW should be bloody proud of that." The NAS was previously threatened with a merger either with Macquarie University or UNSW in 2006, which led students to stage protests outside the NSW Parliament. A NSW Department of Education review was told in 2014 the school's home in the historic Darlinghurst jail should be turned into a new high school, with the art institution relocated to western Sydney.