The Smithsonian Institution is dismantling Smithsonian Books, a widely respected publishing division of the museum and research complex that dates back 156 years.

Driven by a net loss of $2 million in the last decade, officials say, the move will result in publishing fewer scholarly books and in the enlistment of corporate partners to make the Smithsonian brand more profitable. Critics worry that overhauling the book unit will disrupt an essential part of James Smithson's mandate for the institution -- "the increase and diffusion of knowledge."

Corporate partnerships have been strongly questioned during the tenure of Smithsonian Secretary Lawrence Small, who has said they are a necessity forced by the slowdown in government and private funding. Small has promised that the Smithsonian will retain control of content in all such joint ventures.

"People are absolutely alarmed and are gravely saddened by the demise of a hugely reputable press. It is going to hurt people financially and hurt the Smithsonian's reputation," says Richard E. McCabe, the executive vice president of the Wildlife Management Institute, which has published two volumes under the Smithsonian imprint.

This development has been met with dismay by authors, who value the prestige Smithsonian Books gave to sometimes obscure topics and who question whether this is another move to additional commercialization, such as the naming of galleries and theaters for donors. James M. Goode, whose studies of Washington buildings and sculptures have been published by the Smithsonian since 1974, calls the unit's demise "a tragedy."

The cutback follows the failure of an effort that started in 2002 to make Smithsonian Books profitable. "There have been steady losses at the press over a long period of time," says David Evans, the Smithsonian's undersecretary for science, who will take over the publication of scholarly tracts.

"The plan was to do less of the scholarly books and more commercial books," says Don Fehr, who was recruited from the publishing industry two years ago to run the book division. "I was given a year to turn it around. It was like turning around an aircraft carrier. It became a business with more risk involved." Smithsonian officials became uncomfortable with the risk level, he says.

Fehr says the changes will result in more effective management. "We are actively setting up the partnerships," says the director, who met with several potential partners at the just-concluded massive book fair in Frankfurt, Germany. "[In discussions so far] they have said, 'Sure, what's not to like? The Smithsonian gives us high quality and a recognizable imprint.' "

Fehr started with a staff of 28, of which 16 will lose jobs as of January. After the reorganization, two people will handle the book transition. Smithsonian Business Ventures, the office that handles other money-generating enterprises for the institution's 18 museums, will now also oversee the commercial book publishing division.

Smithsonian has 700 to 800 books in print, and in recent years has published about 50 general-interest nonfiction and scholarly books per year. But in the current publishing cycle starting this fall, the list is 40 books, and 10 of those have already been placed on hold, pending any co-publishing deals under the reorganization.

The cutback comes amid the general decline of university presses, which provide the Smithsonian model. University or scholarly presses have been suffering in recent years because of the shrinking budgets of libraries, the battles of independent bookstores with the national chains, public disinterest and the emergence of electronic book forms.

"There are a number of issues coming together," says Hans Sues, a paleontologist at the National Museum of Natural History and a member of the Smithsonian Task Force on Academic Publications. "There is a push to go to electronic publishing and publishing on demand. But it is in a transitional stage. After a while the CD-ROMs start deteriorating physically and Web sites disappear. There is a feeling of unease in the scholarly community, and here. I wouldn't gloss over that."

Evans, an oceanographer, says future output of strictly scholarly work will be limited, but he does want a highly visible outlet for the Smithsonian's own scientists. While the press was experiencing problems, some of the scientists decided to publish elsewhere.

"They needed to get their work out. That is the piece that we need to pull back. I do see amplifying this model, but not going to a full press," the undersecretary says.

Sues says the scientists favor having their own system over inactivity. "It is important to get out data and scientific studies. Instead of waiting, we are looking at alternative publishing models," he says.

The scholarly books are subsidized through a congressional stipend of $1.5 million, and are distributed free to libraries and education institutions. In recent years the output for some series has fallen off. Two years ago there were seven books or monographs published under the title Smithsonian Contributions and Studies Series; last year there was one zoology study about the Western Atlantic clingfish.

"It would be a shame to see the Smithsonian left without a strong presence in the scholarly publishing community," says Vincent Burke, a former science editor at the Smithsonian, now the life sciences editor at Johns Hopkins University Press.

As part of the cutback, Smithsonian Books is considering selling off thousands of copies of 238 titles that are stored in a warehouse. The Smithsonian says they are notifying authors about how many of their books are left and the prospects of co-publishing for additional editions.

McCabe, of the Wildlife Management Institute, doesn't approve. "They are sitting on two of our books they produced. We want them back," he says.

Putting the books on remainder -- a seller's device to lower the price considerably and gain some profit -- is a violation of his contract, he says.

"Once you remainder a scientific book you end its shelf life," says McCabe. "Our contract says the author has to be notified and have the right of first refusal. They are not doing that."

Smithsonian Books' new titles include works by Joy Hakim and Scott Stossel, but it has cut down on the number of releases.