The historic Palacete building at 31 Paseo del General Martínez Campos in Madrid’s upmarket Chamberí district has been home to the British Council in Spain for about 70 years.

About 5,000 students each year pass through its 35 classrooms, learning English, attending exams, and forging cultural ties with the UK. Over the years that is hundreds of thousands of Madrileños (people from Madrid), while it also serves as a centre for the expat community.

But no longer, it seems. News that the high-end building is to be sold has brought staff on to the streets in protest. With no confirmation of where the 320 staff members will be relocated to, there is anger and real concern that their jobs may be at risk. The sale of another building in Barcelona is also proposed, it is understood.

It is part of a growing backlash across Europe by British Council staff against radical cuts and restructuring, without which, the organisation’s senior management has warned, the world’s leading soft-power agency could disappear “within a decade”.

This week, staff in Italy staged a national strike and protest against plans to cease English-language teaching after 80 years in the country, with the loss of 108 of 130 jobs.

A desperate effort to pay an outstanding £197m debt from a Covid-era Conservative government emergency loan on commercial terms, with interest to be repaid by September, has forced drastic action.

Aside from anger at UK government failure to protect an organisation, set up almost a century ago to combat fascism and communism, staff have also expressed deep concerns over the organisation’s leadership and the way measures are being implemented.

A letter of no confidence in the senior leadership team, to the board of trustees in London, seen by the Guardian, has been signed by 298 of Spain’s 560 staff. The sale, it states, “reflects a pattern of shortsighted decisions, weak leadership and poorly communicated changes made without sufficient regard for staff or organisational stability”.

There was, it added, great anger over the direction the British Council has taken over the last few years, “which has included round after round of restructuring, investments with little return, short-termism, lack of accountability and centralised decision making”.

Another letter of no confidence has been sent by staff in Italy, with further letters from France, and more understood to be following. There are concerns, too, that the British Council’s Paris building could be at risk of sale in the future and over the reduction of services in Latvia, Lithuania, Estonia, Croatia and Austria.

Stuart Anderson, the Workers’ Commission, (CCOO) union representative, said there were questions over the management strategy of the organisation. One of those was its “very centralised decision-making and, you might dare say, it’s a colonial attitude: ‘London knows best’ with little consideration of local markets or on-the-ground expertise built up over decades in those markets.”

Staff were also calling on the UK government to stop the “death spiral”. The union said it “would hope that a government trying to reset the relationship between the UK and the EU would not damage the soft power organisations that have been there for well close to 100 years.”

Anderson, who has worked for the organisation for nearly 20 years and is chair of the British Council European Works Council, added: “It’s a great concern in the UK that people don’t actually, or don’t necessarily, understand what the British Council means to millions of people around the world. The analogy is the BBC World Service. The organisation has a really, respected brand globally, and is being run into the ground.”

Few seem to question its value. There is support from many quarters – the arts, universities, military, politicians.

Neil Kinnock, the former Labour leader and a former British Council chair, said: “The British Council does not want to make these cuts. They are being forced into it by the conditions required by the Treasury.”

It was set up to combat fascism and communism, “and combat it with understanding of Britain and its values – soft power as it’s called now. And they’ve done it brilliantly for 92 years”, said Kinnock, whose son, Stephen, an MP, is a former British Council country director in Russia, before being forced out by the Russian government.

There was widespread support “from those who have seen it in operation”.

Kinnock added: “In a world in turmoil where the far right is on the march and we don’t pretend to be a leading military or even political power now, especially in the wake of Brexit, the soft power deployed by the British Council is absolutely invaluable.

“I sympathise very much with the staff, so does the leadership,” he said. The British Council had “camped out” in the Foreign Office for last three or four years and put up a “hell of a fight”.

Kinnock said: “What the government should do is either find a way of cancelling the debt, or even rescheduling the debt. Because it’s to absolutely nobody’s advantage to lose the British Council.”

If it were to disappear “we’d lose recognition, reputation and countless contacts across the world including current and future decision-makers in every sphere”.

The organisation, which works in more than 100 countries, will continue operating in Spain, where it has operated for 85 years, and property sale does not represent a withdrawal from Madrid or Barcelona, it is understood.

A spokesperson for the British Council said it “remained committed to building connections, trust and understanding between people in the UK and countries across Europe”.

It continued to face financial challenges and was “taking all necessary steps to significantly cut costs and grow our revenue” including the proposed sales of some buildings to protect as many jobs as possible, maintain its “vital” work, and secure its long-term future across Europe and around the world.

“We understand that the proposed changes may be worrying for colleagues, students, and partners and we are committed to managing this process with transparency and care.”