A new law has been approved to allow art looted by the Nazis and found in British museums to be returned to the heirs of the original owners.

Labour’s Andrew Dismore, MP for Hendon, sponsored the Holocaust (Stolen Art) Restitution Act, which has been approved by the House of Lords.

It will now be given royal assent before becoming law.

Before the law was passed, the spoliation panel would recommend pieces to be returned to their owners, but museums had no legal powers to carry out the recommendations.

Once in place, the law will allow heirs to have a choice whether to have their belongings returned to them, or to be given compensation.

Estimates suggest around 20 looted items are in British museums, but the number could be far greater.

Mr Dismore said: “It shows what could be achieved by a determined backbencher: by rolling out my sleeping bag and sleeping on the floor of the Public Bill Office overnight, I was able to become the first in the queue to apply for Second Readings after the balloted Bills, and this tactic paid off.

"Whilst I do not envisage the Act having to be used very frequently, this is an important moral step, to ensure that we can close yet a further chapter on the appalling crimes of the Holocaust.”