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The ex-gratia payment will be made in respect of Jan Griffier the Elder’s landscape View of Hampton Court Palace (1710) which now hangs in the Tate Gallery after it was purchased in good faith by the Friends of the Tate in 1961.

The compensation figure was recommended in the first report of the Spoliation Advisory Panel under the chairmanship of retired Lord Justice of appeal, the Rt Hon Sir David Hirst.

The panel was set up in February last year to help resolve claims from people – or their heirs – who lost cultural objects during the Nazi era which are now held by UK collections.

“It is important that questions of ownership of works of art arising from the terrible events of the Nazi era are resolved,” said Mr Howarth. “Although the report makes clear that the family, who wish to remain anonymous, have no legal title to the painting, and that there is no criticism whatsoever of the Tate Gallery, I accept the panel’s advice that there is a moral strength to the claimants’ argument.”