The picture is now being examined by lawyers at the Crown Prosecution Service.

Officials at the gallery confirmed that the police were involved but refused to say who had decided the picture should be removed.

Peter Doroschenko, the director of the gallery, said: "I'm afraid I can't comment on this."

Claire Byers, the communications director, said: "The police are involved in this incident and we are fully cooperating with their inquiries. That is all I can say on this at the moment."

The image is being examined by police and lawyers from the Crown Prosecution Service for consideration under the 1978 Protection of Children Act.

A Northumbria police spokesman said yesterday: "The circumstances around who may have been involved in the production of the image and who may have owned it or owns it forms part of the investigation.

"We attended the Baltic Centre last Thursday at the invitation of the management who were seeking advice about an item for an exhibition prior to it going on public display.

"This item is being assessed and Northumbria Police, in consultation with the CPS, is investigating the circumstances surrounding it. The incident is ongoing and investigations are now being carried out."

Goldin, 54, is well known for her shots of young, semi-clothed girls.

Thanksgiving is described by the Baltic as an installation of photographs which documents Goldin's life from 1973 to 1999 - "a micro-retrospective of her career."

In 2001, one of her photos featuring a very young naked girl looking up between the open legs of a semi-clothed older child had been criticised for making money from exploiting children. It was published in a book alongside similar works to accompany an exhibition at the Saatchi Gallery in north London.

Goldin was born in Washington DC, ran away from home and was fostered by several families during her childhood. She moved to New York after graduating from art school where she took became known for pictures of alcoholics, drug addicts and Aids sufferers.

She was admitted to rehab in the 1990s and much of her work since has reflected her own experiences.

Sir Elton John has long been an admirer of her work and is also a close friend. He was not available for comment and a spokesman referred inquiries to the Baltic.

This is not the first time an artist's pictures of children has been stripped from a public gallery over fears that it was obscene.