`Besieged", "embattled" and "beleaguered". When your name appears in a sentence with those three words, says Brian Kennedy, you know you've made it. And he's talking from experience. Since the Dubliner became director of the National Gallery of Australia in 1997, he has commanded column inches in his adopted country as frequently as any half-active government official or pop star. Head of what's been dubbed the "most political arts institution in the nation", he acknowledges that he symbolises his establishment in much the same way as a "minister symbolises a department". And, in true ministerial style, some of his decisions have provoked outrage and led to calls for his resignation. But Kennedy fully intends to stay the course. A self-avowed "risk-taker", he was brought in "with a mandate for change". "I'm in arts politics," says Kennedy. "It's a delicate dance." Delicate but far from unfamiliar. His eight-year stint as assistant director of the National Gallery of Ireland might not have prepared him for the demands of his present position, but the Irish Arts Council's pulping of its own history in 1991, Kennedy's masterful Dreams and Responsibilities, taught him a lot about controversy.

As director of the NGA, he's weathered storms of a somewhat different ilk. Fallout from an initial staff shake-up, resignations, criticism over the acquisition of a David Hockney painting for the equivalent of more than £2 million and allegations about the gallery's unhealthy air-conditioning system (subsequently unsupported) paled in the face of what happened in November 1999, when the NGA cancelled Sensation, the show of young British artists from the Charles Saatchi collection.

Including cows' innards and an image of the Madonna with a breast made from elephant dung, Sensation had caused a hullabaloo both in London and New York. When the NGA said it no longer intended to host the exhibition, Kennedy was widely cast in the role of censor.

"There was such curiosity," says Kennedy. "Had I cut it because I didn't like contemporary art or because I'd got weak-kneed or because I was a Catholic or because I'd reacted to a whole lot of pressure from outside?"

In fact, he says, the decision to ditch Sensation, had nothing to do with content and everything to do with ethical concerns about how the show had been financed.

Charles Saatchi, it emerged, had contributed money towards the Brooklyn exhibition, as had dealers who represented some of the Sensation artists. Questions about how Brooklyn handled Sensation have since prompted the American Association of Museums to issue new ethical guidelines, Kennedy argues in the present edition of the NGA's magazine.

But it didn't help when a letter he had written to federal arts minister Richard Alston was made public under the laws relating to freedom of information. At the end of the letter, Kennedy had asked Alston whether he had any objection to Sensation. The use of the word "objection", he later admitted to a senate committee, was "infelicitous". The perception that "somehow the government must have stopped the exhibition" was given fuel.

"There are lots of letters we write that we would write differently," says Kennedy. "And the [gallery] council knows that and the government knows that. It's very important not to give any sense that your political independence is in doubt. And it's not in doubt."

Another hurdle came when, despite a petition by hundreds of artists, he appointed John McDonald as head of Australian art at the gallery. A former critic, McDonald was seen by many in the industry as being hostile to certain forms of contemporary Australian art. When, in September 2000, after a year in the job, McDonald announced his resignation, some of those who had registered their protest to begin with suggested Kennedy should step down as director as well.

He didn't. But letters he had written came back to haunt him again at the end of last year. In late October, the Sydney Morning Herald published excerpts of an apology from Kennedy to the Minister for the Arts, Sile de Valera.

De Valera had rebuked Kennedy for a letter he had written to Bertie Ahern, in which he expressed his frustration at the delay in confirming the proposed loan of the Book of Kells to the NGA. In the letter to Ahern, Kennedy had warned of "serious consequences" should his gallery not get the treasure and had apparently criticised some aspects of Irish arts policy. The book eventually travelled to the NGA early last year for a three-month exhibition which was attended by 80,000 people.

Perhaps because of the recently publicised dealings with Minister de Valera, this leading historian of Irish arts policy is reluctant to comment too specifically on her discussion document, Towards a New Frame- work for the Arts, saying she is to be congratulated on bringing forward a "stimulating and usefully provocative document".

Pointing out that it's taken 27 years for new arts legislation to be proposed, he emphasises the importance of de Valera's text. He believes that the development of arts-related services has "necessitated a rethink about the role of the Arts Council as the major funding distribution agency in the arts in Ireland".

"The Council has talked of itself as a development agency doing for the arts what the Industrial Development Authority did for the economy," he says. "The key issue now, however, is the same one as in the early 1970s."

He quotes Charles Haughey's Harvard speech of 1972, in which Haughey said he regarded a comprehensive arts policy with adequate financial provision as an "integral part of good government in a modern community". Haughey also advocated complete artistic freedom and said the government's part must be confined to creating conditions within which art could flourish - to "foster and not to control".

Kennedy believes Haughey's advice of 1972 is "worth keeping current in discussions today about a new legislative framework for the arts".

Kennedy admits he's made some mistakes since taking up his position in Australia, but the NGA, he insists, should be judged fairly, on its merits. And an impressive institution it is, with an eclectic, evolving and extremely well-displayed collection of Aboriginal, Australian and international art. Since Kennedy arrived, the gallery has reduced the rate of acquisitions as planned, launched a website, introduced free entry and wheelchair access and, this year, recorded a 75 per cent increase in visitor numbers.

Kennedy likes concentrating on positives. He's obviously irked by and impatient with the extent of the bad press he faces in Australia. He is extremely accountable and goes before the senate estimates twice a year. "I know the TV cameras are going to be there and I'm likely to be on the front page," he says. He has hired a media adviser, Ken Begg, who comes into Kennedy's office during our interview, sits down and leaves after less than five minutes without saying anything.

Kennedy came to Australia a golden boy, but headlines about "Irish charm" were soon replaced by more unflattering catchwords like "Irish stew". The next two years of the delicate dance will undoubtedly be as tumultuous as the previous three. Besieged, embattled and beleaguered he may be, but he's convinced he's got the mettle for the job. "Australia toughens you up," he says, as I'm about to leave. "I remember at the first reception the Irish Embassy had for me, I said: `Look, when they're chopping my ankles off, that's when I'll need your support.' But that's the nature of Australian style, you know. It's combative and you've gotta be in there and independent and vigorous and not taking it personally - and I don't. It's too big for that."