The British Museum has agreed to pay the family of a Jewish art lover whose collection was looted by the Nazis in March 1939.

The claim was made by Uri Peled, after proving that the museum-owned medieval German drawing “Young Couple in a Landscape” had originally belonged to his grandfather, Arthur Feldmann.

Mr Feldmann had lost his extensive art collection in Brno, Czechoslovakia, when it was seized by the Gestapo. The painting was later sold at Sotheby’s, before being gifted to the British Museum in 1993 by the wife of London collector Edmund Schilling.

According to Haaretz, the museum offered to compensate the family an ex gratia payment of £6,000, which would allow it to keep the drawing.

Mr Peled, who lives in Tel Aviv, said: “The Feldmann family is very happy that the drawing will remain in the British Museum collection.

“Whenever we can, the family prefers to leave drawings with museums to be enjoyed by visitors and scholars and instead ask to be compensated for their loss.”

Jonathan Williams, deputy director of the British Museum, said: “This drawing, and others from the original Feldmann collection, will serve as a permanent memorial both to the outstanding importance of Dr. Feldmann’s collection, and to the terrible circumstances of its spoliation and dispersal.”