Museums should contribute to the priorities of their local area and diversify their audiences, according to a review of the sector.
The review carried out by creative industry entrepreneur Neil Mendoza for the Department for Digital, Culture, Media and Sport recommends the creation of a Museums Action Plan by September next year.
The review found evidence of a 'strong, dynamic' sector that is responding well to an increasingly competitive visitor market, with museums becoming more entrepreneurial and seeking other forms of income through cafes, shops and educational services.
It identified 16 sources of public funding and support for the museum sector including investment from central government, local authorities and the National Lottery as well as VAT refunds and the acceptance in Lieu and Cultural Gifts Scheme.
It is not thought reintroducing entry charges is an option being considered.
John Glen, minister for arts, heritage and tourism said: 'The Museums Action Plan will provide additional leadership and expertise to local and regional museums to help them grow and thrive, increase audiences and ensure a sustainable future for this important sector.'
