One of Israel's richest men is to inject millions of pounds into the UK arts scene at a time when the government is cutting public spending on cultural life.

Eyal Ofer, a shipping magnate and property investor said to be worth $6 billion by Forbes, has announced that his family foundation is giving £10 million to the Tate Modern.

The money will go towards a 60 per cent expansion in the London gallery, with part of the exhibition space being renamed in Mr Ofer's honour.

The redevelopment will add around 21,000 square metres to Tate Modern. With Mr Ofer's donation, the gallery will have raised 85 per cent of the £215 million needed for the project.

The Haifa-born philanthropist, who served in the IDF for six years, is based in New York and Monaco but has previously supported British projects, including the Royal Row Barge Gloriana for last year's Diamond Jubilee. His late father Sammy served in the Royal Navy during the Second World War and was a prominent donor to the National Maritime Museum in Greenwich, helping to fund the repairs to the Cutty Sark.

Estimated to be the second richest Israeli, only his younger brother Idan is thought to be worth more.

Although the eight per cent cut to the UK's culture budget announced in last week's spending review was not as extensive as feared, private donations are deemed crucial to the survival of arts institutions.

Describing the Tate Modern as iconic, and one of the world's great public art institutions, Mr Ofer said it was a "privilege" to be helping it "to enhance the experience and accessibility of contemporary art for an even broader range of visitors from across the UK and abroad".

Sir Nicholas Serota said that the philanthropist's generosity "will help to make Tate Modern a truly 21st century museum".

"It is exciting to see such outstanding philanthropy continuing from one generation to the next," he added.