"It's a jungle out there,'' laughs the architect Bud Brannigan. ''But it's even more of a jungle in here.''

We are in the late Margaret Olley's famously cluttered home studio in Paddington and Brannigan is measuring up what turns out to be the poetically asymmetrical dimensions of her main dining room, where everyone from the Governor-General, Quentin Bryce, to her dear friend, the comedian Barry Humphries, ''enjoyed'' her cooking.

I ask Brannigan whether the Margaret Olley Art Studio, which will open at Tweed River Gallery, Murwillumbah, next year, will encompass her untamed garden as well as her magically contrived interiors.

Yes, he says. ''All the spaces where Margaret painted in this house relied on light from her garden. This was her lifelong installation. Her art and her life, coming to a climax. We plan to set up her three important painting rooms in the same compass orientation.''

Olley, who died on July 26 last year, was one of the greatest art patrons Australia has known. Many regional art galleries in NSW were beneficiaries of her largesse. Several hoped to ''win'' this final prize: particularly Lismore (where she was born) and Newcastle (where she lived until a fire destroyed so much of her early work).

But it was the Tweed she finally decided on, in the final few hours of her life. That is partly because the Tweed is where she was raised but also because she remained a canny negotiator right to the end, appreciating that the relatively new gallery on a former dairy farm, donated by her friends Doug and Margot Anthony, was a tourist destination that could benefit from her celebrity pulling power.

Though Olley is best known for her generosity towards the Art Gallery of NSW, her own paintings are better spread around those state galleries with which she had a relationship. But she was hardly alone. Artist Judy Cassab's son, John Seed, has recently placed many of his mother's paintings in regional galleries, while Euan Macleod, Chris Hodges and Marion Borgelt are other frequent donors.

In the past few years, NSW's regional art galleries have improved dramatically. For more than a century, we were poor cousins, languishing behind Victoria's gold rush money. Bendigo and Ballarat erected not just beautiful buildings but amassed magnificent collections with important works by Australian artists such as Arthur Streeton, Tom Roberts and Rupert Bunny. Meanwhile, the Broken Hill Regional Art Gallery is the oldest in NSW and only dates to 1904.

Suddenly, though, NSW has undergone its own gallery boom. Not only do we now have far more regional galleries (about 30) than any other state but many have been - or are being - extended, improved, reconfigured or reinvented. Albury, for example, is planning a large-scale redevelopment of its cultural centre.

And that's not counting the new ones such as the Hawkesbury Regional Gallery, which opened in 2005, or the long-awaited Blue Mountains Cultural Centre due to open later this year in Katoomba.

So what's the story here?

Joe Eisenberg is the state's longest-serving regional gallery director, having worked for 28 years in the sector. Now 64, he has masterminded the transformation of the Maitland Regional Art Gallery over the past eight years, having done a similar job at Armidale's New England Regional Art Museum.

Eisenberg says the turning point was Neville Wran's premiership from 1976-86. ''One of Wran's art policies was to have more regional galleries in NSW than Victoria,'' he says. ''By the time he left office, that had been achieved, partly because of the approaching bicentenary in 1988. Grafton and Wagga Wagga are two galleries that date from that period.''

About that time, too, the federally appointed Australia Council suggested regional galleries should develop their own individual specialities rather than simply duplicate each other.

''Some did, some didn't,'' Eisenberg says. ''Wagga Wagga specialises in glass, while Tamworth has its fibre collection, which it takes interstate every two years. Newcastle collects ceramics. In Maitland - which is a brand-new gallery, really, replacing an old, rubbishy one - we collect only works on paper.''

With 11 exhibition spaces, including two dedicated to children and young adults, Maitland is considered one of the most enterprising art galleries in Australia outside the big cities. Others, such as Goulburn, are a single room.

All, to a greater or lesser extent, serve their local artist communities. But regional galleries are no longer seen as mere provincial outposts of their big-city cousins.

''In the old days, people in the country couldn't easily get into Sydney or Canberra to see exhibitions,'' Eisenberg says. That led to travelling exhibitions by the National Gallery of Australia, the Art Gallery of NSW or other cultural bodies such as the Australian War Memorial.

''But the state and federal institutions, which all used to have travelling sections, can't afford them now. It's the regional galleries which are touring these days,'' Eisenberg says, admitting that when he started his career the aim of most regional gallery directors was to be spotted and win a curatorial position at one of the state or national giants.

''Now, there's a whole industry of talented people who realise they can achieve more at a regional gallery. Richard [Perram] at Bathurst, for example, focuses on mid-career artists [who might never secure a survey show at the Art Gallery of NSW]. ''We have a lot more independence as regional directors. The only thing that holds us back is how much money we can raise independently outside public funding.

''We're lucky here in the Hunter. Lake Macquarie City Art Gallery [opened in 2001], Newcastle Art Gallery [Australia's first purpose-built regional gallery, opened by the Queen in 1977 but now the subject of a $20 million redevelopment] and ourselves all do really cutting-edge stuff.''

Local rivalries help fuel creative tension. ''It's friendly,'' Eisenberg says. ''But if we've got 11 spaces, you can bet Newcastle will want 11-plus.''

Bathurst and Orange, only 30 minutes apart by car, have a similar dynamic. Alan Sisley has been the director of the Orange Regional Art Gallery for 20 years. Until recent cutbacks, he changed exhibitions every four weeks. ''We still do around 28 exhibitions a year,'' he says. ''Around 70 per cent of our audience is from the local area, so we change shows frequently to maintain their interest.''

Sisley's gallery - which specialises in sculpture, boosted recently by winning works from Sydney's annual Sculpture by the Sea exhibition - is often cited as an example of an enlightened local council realising art, when allied with Orange's reputation for restaurants and vineyards, is a vital ingredient in the tourist mix.

''Local government seems to have recognised the benefits of cultural tourism,'' the director of Tweed River, Susi Muddiman, says. ''Unfortunately, the building boom hasn't been matched by the infrastructure to run the galleries properly. There are a lot of grand, new edifices with not enough inside.

''I think it is great that there's this trail of regional galleries around NSW but we are not funded well enough.''

When it comes to playing the tourist card, nothing comes close to the massive development at Katoomba, which will incorporate the largest Coles supermarket in NSW. The director of the Blue Mountains Cultural Centre, Paul Brinkman, was poached from a similar position in Cairns, which experiences a high turnover of tourists. ''I think [the similarities] are one of the reasons I was offered this job,'' he says. ''A key part of this cultural centre is to bring tourists who might go to the Three Sisters into the township of Katoomba itself, where they will increase their spend.

''Cairns Regional Gallery is [also] in the town centre, surrounded by fake boomerangs and stuffed koalas, but a place where tourists can find some cultural integrity.''

The cultural centre, on the fourth floor, includes a 600-square-metre gallery, a World Heritage site interpretive centre, seminar rooms, a theatrette, a courtyard for displays of public art and a new viewing platform with views across the Jamieson Valley.

Brinkman's premiere exhibition, Picturing the Great Divide: Historic and Contemporary Visions of Australia's Blue Mountains, is an obvious statement of intent. ''We're borrowing major works from galleries across Australia,'' he says. ''And we're going right back to Eugene von Guerard, who came up here [in the 19th century].''

He says he relishes the fact the new centre will not come with a permanent collection: ''Most regional galleries come about because their local government had a collection they didn't know what to do with, so they open a gallery,'' he says. ''This isn't being built on those lines, though I do intend to build a collection once we're established. Obviously, that collection will be based on artists who have lived in, or have been inspired by, this massive region.

''But the fact we are not shackled by a collection from the beginning means we can have exhibitions which challenge and inspire locals as well as tourists. And we will be telling indigenous as well as non-indigenous stories.''

However, the acting director of the Wagga Wagga Art Gallery, Michael Scarrone, says the decision to begin collecting glass works in the late 1970s means

it now attracts glass lovers from around the world to view more than 500 individual works.

A glassmaker for 25 years before he joined the gallery as the curator of the National Art Glass Collection, Scarrone says the city already had an association with glass.

''One of the first hot-glass studios in Australia was at Charles Sturt University,'' he says. ''It's not there any more, unfortunately, but the synchronicity was there.''

But the most fortunate regional gallery director of 2012 must be Muddiman, who arrived at Tweed River in 2007, several months after Olley and the former Art Gallery of NSW boss, Edmund Capon, opened the second phase of what was always planned as a three-stage development.

''That was Margaret's last visit,'' Muddiman says.

''The opening show for stage two was [that year's] Archibald Prize. She loved the site and loved the gallery. She wrote some lovely words in the visitors' book.''

Since then, the Tweed River gallery has become ''a destination'' (Muddiman's phrase).

The gallery, which specialises in Australian portraiture, already attracts up to 60,000 visitors a year, including tourists from the Gold Coast, over the border.

When Olley's co-executor, Phillip Bacon, offered Muddiman the chance to house a new Margaret Olley Centre, she leapt at it.

Now, as the gallery architect, Brannigan, clambers through the clutter of Olley's home, he lists what the new extension can accommodate: three of the rooms where Olley loved to paint; an exhibition area showing 30 of her favourite paintings; a couch theatrette where visitors can watch her at work; an education workshop; and an artist-in-residence studio open to those following Olley's artistic interests.

Since plans for a third phase are well advanced, the first visitors will be pouring into the Olley centre by the end of next year. Even the old girl with the lethal walking frame would have been impressed by the speed.

Worth stopping: the gallery trail

Albury Regional Gallery Works by Russell Drysdale, who lived and worked in Albury, plus an important photographic collection.

Bathurst Regional Gallery Australian art from the 1950s, Lloyd Rees. Hill End artists.

Lismore Regional Gallery Work by Margaret Olley, Lloyd Rees, Albert Namatjira, Thea Proctor, Kevin Connor, and Northern Rivers artists.

Maitland Regional Gallery Works on paper.

New England Regional Art Museum (Armidale) One of regional Australia's most valuable collections of Australian paintings.

Newcastle Regional Gallery An important collection of drawings, paintings, prints, sculpture and ceramics.

Orange Regional Gallery Public sculptures by Richard Goodwin, Bronwyn Oliver, Ian Marr and Bert Flugelman.

Tamworth Regional Gallery Home to the Tamworth Textile Triennial, showcasing the best of fibre textile art.

Tweed River Regional Gallery Australian portraits.

Wagga Wagga Art Gallery The National Art Glass Gallery collection.

Wollongong City Gallery Focuses on artists from the Illawarra and south coast regions.