Two museums under control of the local authority, Northampton Museum and Art Gallery and Abington Park Museum, will lose their Arts Council accreditation for the next five years.
The controversy related to ownership of the statue, which was donated by a local luminary in the 19th century.
Scott Furlong, the Arts Council's director of acquisitions, exports and loans, commented: "It is of great importance that the public retain their trust in museums to look after the collections held in their name.
"There is a very real risk that this trust, and particularly that of potential donors and funders, will be seriously undermined if disposals from public collections are seen to be driven by financial considerations and in breach of our professional standards and ethical code."
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