If Maine Gov. Paul LePage doesn't wish to display a mural depicting the state's labor history, then the U.S. Department of Labor says federal money used to create it should be returned.

The department said Monday that LePage violated the terms of federal laws governing money used to pay for most of the mural's $60,000 cost when he removed the art work from state offices last month.

The demand came in a letter to state labor officials from Gay Gilbert, administrator of the U.S. Labor Department's office of unemployment insurance. The letter was obtained by The Associated Press.

Gilbert's letter is the latest twist in a growing national dispute over LePage's decision to remove the 36-foot mural from the state Labor Department headquarters. LePage, a Republican, said it was biased towards organized labor at the expense of his pro-business agenda.

The mural, in place since 2008, depicts scenes that include a paper mill strike in the town of Jay, a strike at a shoe plant in Lewiston, women shipbuilders at Bath Iron Works and former U.S. Labor Secretary Frances Perkins, a native of Maine.

Adam Fisher, a spokesman for the Maine Department of Labor, said officials are reviewing the letter and "assessing what it may mean for the agency moving forward."

LePage's removal of the mural attracted attention as lawmakers in Wisconsin and other states moved to restrict collective bargaining by public workers. Labor advocates, artists and others say the mural depicts an important part of Maine history and belongs at the state's Department of Labor office.

LePage spokeswoman Adrienne Bennett said last week that the mural is in storage and awaits transfer to "a suitable venue for public display." She did not immediately respond to a request for comment on the demand for repayment of federal money.

About 63 percent of the mural's cost came from money in the state's account in the federal unemployment trust fund. Gilbert's letter said the state would have to return 63 percent of the fair market value of the mural to that account, which is supported by federal employer taxes.

"Alternatively, the state could again display the mural in its headquarters or in another state employment security building," the letter said.

U.S. Labor Secretary Hilda Solis has not commented publicly on the mural dispute. Her spokesman, Carl Fillicio, said she "has monitored the situation and asked staff to look into it."

LePage's decision to remove the mural was prompted in part by an anonymous letter to the governor's office _ signed by "A Secret Admirer" _ that said the mural was propaganda in line with "communist North Korea where they use these murals to brainwash the masses."

LePage also directed that the agency's conference rooms, which are named for labor leaders, be renamed for something considered unbiased.

Several hundred people attended a rally in the State House on Monday demanding the return of the labor mural to the state Labor Department headquarters.

Don Tuski, president of the Maine College of Art, said the removal of the mural is censorship.

"It's very simple: Just put it back," Tuski said. The crowd then loudly chanted, "Put it back, put it back," over and over.

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Associated Press writer Clarke Canfield contributed to this report from Augusta, Maine.