(CNN) -- The federal government says it wants back money it provided to Maine if the state's governor does not reinstall a mural the funds helped pay for in its Department of Labor building.

"We understand ... the mural is no longer on display in your headquarters," Gay Gilbert, a senior U.S. Labor Department official, wrote in a letter this week to the Maine department. "Thus, it is no longer being used for an administrative purpose permitted by the Reed Act."

"Accordingly ... the state must ... return to its (Unemployment Trust Fund) account the amount of the Reed Act funds represented by the mural," the letter said.

Last week, Gov. Paul LePage followed through with his decision to remove the mural -- which depicts the history of the workers' movement -- from the building's lobby.

In addition to removing the 36-foot-long, 11-panel mural, the LePage administration announced that conference rooms bearing the names of American labor movement icons would be renamed.

Most of the artist's commission of $60,000 was paid from federal money, made available by transferring it to the state's account in the trust fund, according to the letter.

"We have reviewed the letter and are assessing what it may mean for the agency moving forward," said Adam Fisher, a spokesman for the Maine Department of Labor.

State officials said removal of the mural was needed to reflect a new image for the department, one not tilted toward organized labor. They said visitors to the lobby had complained that the mural is anti-business.

"The mural has been removed and is in storage awaiting relocation to a more appropriate venue," LePage's press secretary, Adrienne Bennett, said in a statement last week. "We understand that not everyone agrees with this decision, but the Maine Department of Labor has to be focused on the job at hand."

Maine AFL-CIO President Don Berry called it "a spiteful, mean-spirited move by the governor that does nothing to create jobs or improve the Maine economy."

Acting Maine Labor Commissioner Laura Boyett had earlier announced a contest to replace the names affixed to the conference rooms, which include Cesar Chavez and Frances Perkins.

Chavez founded the National Farm Workers Association. Perkins, the first woman to hold a Cabinet-level position in the United States, served as labor secretary under President Franklin D. Roosevelt.

Bennett has said the Maine Arts Commission is helping find a new site for the mural, which had been installed in 2008.