He told MPs that the arrangements being suggested by the DCMS, were "not a workable structure".
While none of the works had been valued, the DCMS said three pieces were particularly significant.
If that decision has to be taken it should be done by the DCMS or the relevant secretary.
For further information, including an application pack, visit the DCMS website here.
But the DCMS said since the years covered by the report its contribution had increased and would do so further.
Mr Thomas said believed DCMS decided to ignore the legal advice "and were pressuring S4C to acquiesce to the reduction".
Public Lending Right - funded by the Department for Culture, Media and Sport (DCMS) - was established in law in 1979.
The Department for Culture, Media and Sport (DCMS) has drawn up the regulations firms must take to comply with the law.
"It is a key part of the government's cultural policy that obstacles to admission should be tackled, " a DCMS spokesman said.
BBC: NEWS | Entertainment | Museums count cost of going free
Guidance issued by the Department for Culture, Media and Sport (DCMS) said all three of these tests would have to apply.
Meetings have been held with both the DCMS and the BBC Trust and a further meeting will be held next week.
Conservative culture secretary Theresa May says the Department for Culture, Media and Sport (DCMS) recognised the difficulties but failed to act.
BBC: NEWS | UK | UK Politics | Pub music licence fears 'ignored'
Details of the three paintings had been circulated to specialist art databases in case they had been looted, the DCMS added.
However, writing in a blog post today, the culture secretary Maria Miller said DCMS budgets must not be given "special protection".
The DCMS said in a statement that Mr Purnell had "always acknowledged that the new licensing application process may seem daunting to some".
BBC: NEWS | UK | UK Politics | Pub music licence fears 'ignored'
But she said that if the collection was put up for sale the DCMS would "attempt to secure the collection for the nation".
The Department for Culture, Media and Sport (DCMS) is proposing a test to identify "culturally British" games and animation which would qualify for the break.
Mr Penrose was sacked in the reshuffle earlier this month but according to the DCMS when it comes to bank holidays the status quo remains.
"You give yourself the best chance by going through stages like this, " Tessa Jowell, the secretary for culture, media and sport (DCMS), told Radio Five Live.
The DCMS said the legacy included regenerating part of east London and tenants had been secured for six out of eight venues on the Olympic Park.
The DCMS said while complaints may be investigated, it does not expect the ICO to take enforcement action until information about technical solutions has been drawn up.
However we must set a precedent by achieving this change through the proper DCMS channel and not just on a date-by-date vote by individual local council groups.
He was then Head of Sport and Recreation Division in DCMS from July 1999 to April 2003 followed by Head of Tourism Division April 2003 to September 2004.
DCMS, which will be led by Tessa Jowell, also covers the National Lottery, export licensing of cultural goods, broadcasting (it oversees the BBC's licence fee settlement) film, press freedom and tourism.
The UK embassy building was completely burnt out with the works assumed destroyed but the Department for Culture, Media and Sport (DCMS) said there could have been looting before the attacks.
Harry Reeves is currently Deputy Director, Culture, Department for Culture, Media and Sport (DCMS) where he has been responsible for policy on architecture and the built and historic environment since September 2004.
Following this post he was Head of General Broadcasting Policy 1997-99, principal DCMS author of the green papers on the regulation of broadcasting which paved the way for the current regulatory reforms.
"The channel has said it will broadcast at least 600 hours of UK-originated children's programmes a year and this would comprise at least half of children's programmes on the channel, " DCMS said.
This follows the 2009 DCMS World Heritage Policy Review Consultation and the announcement in February 2010 that the UK would be putting forward fewer sites for consideration by UNESCO for World Heritage status.
UNESCO: Next step in finding new UK World Heritage sites announced
The DCMS emphasises the inspiration to youngsters to take up sport as one of the public benefits of hosting the Games, on top of the regeneration of deprived parts of London and a legacy of world-class facilities.
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