Arts Council England has set up a £160 million emergency support package to help the cultural sector deal with the coronavirus outbreak.

The funds will be used to support individual artists, freelancers and cultural organisations as they try to cope with the situation.

The emergency response package includes £20 million for “creative practitioners and freelancers”, with artists and workers in the cultural sector eligible for cash grants of up to £2,500.

There will also be £50 million for organisations that are not in Arts Council England’s portfolio, with grants up to £35,000.

A further £90 million will be available next month for organisations in Arts Council England’s portfolio and current grants will be advanced by up to six months to help with cash flow.

A statement from the organisation said: “The financial crisis is acute for the cultural sector.

“Evidence shows that closures and cancelled contracts are causing massive and unsustainable loss of revenues.

“The measures we announce today are intended to support individuals and organisations and help them develop creative responses to the Covid-19 crisis, to buoy the public during the period of lockdown.”

The budget has been drawn from Arts Council England’s emergency reserves, as well as through the re-allocation of National Lottery project grants, which are being suspended, and development funds.

Sir Nicholas Serota, chairman of Arts Council England, said: “Covid-19 is having an impact globally, far beyond the cultural sector – but our responsibility is to sustain our sector as best we can, so that artists and organisations can continue to nourish the imagination of people across the country, both during the crisis and in the period of recovery.

“Over the last week, I have been deeply moved by the response of artists and cultural organisations to this crisis: their imagination and invention, but also their generosity, and their care for one another and their communities.

“None of us can hope to weather this storm alone, but by working together in partnership, I believe we can emerge the stronger, with ideas shared, new ways of working, and new relationships forged at the local, national and even international level.”

Arts Council England said the package is focused on “dealing with the immediate crisis” and further steps will be needed “to secure the long-term recovery and reboot of the cultural sector”.

Darren Henley, chief executive of Arts Council England, said: “Right now, our number one priority is to do everything we can to help individual artists and cultural organisations to stay afloat.

“It’s going to be tough, but we need them to be in the best possible shape to use their creativity to benefit people’s lives in villages, towns and cities across England once our communities begin the process of recovering from this terrible virus.”

Gerald Vernon-Jackson, who chairs the Local Government Association’s culture, tourism and sport board, said: “It is particularly positive that some of this funding will provide support to the freelancers and self-employed creative people who are vital to the health of our cultural sector, and who are largely unsupported by other measures announced to date.

“Councils up and down the country are looking closely at how their own grant programmes, contracts and investments can be adapted and amended to support our local cultural organisations.”