A looted 12th-century manuscript is to be returned to Italy, the first under a new law designed to restitute art work in British museums and galleries stolen during the Holocaust.

The intricately decorated missal, a manuscript for Catholic mass, is to return to the cathedral in Benevento.

The missal was acquired by a British soldier from a secondhand book-seller in Naples in 1944, and subsequently bought by the British Museum at an auction in 1947.

Looted by Axis forces in Italy before turning up in the bookshop, the manuscript was later transferred to the British Library.

The missal is the first item to be returned under the Holocaust (Stolen Art) Restitution Act 2009, the brainchild of former Labour MP for Hendon Andrew Dismore. It was aimed at making British museums return heirlooms to families who had property stolen from them by the Nazis.

There are many looted objects in UK museums

But the law will also be used to return valuable stolen items to their original owners, regardless of the circumstances of the theft. In this case, the looted work was returned to the Catholic church.

Anne Webber, co-chair of the Commission for Looted Art in Europe, said the move set a great precedent for other museums in Britain and in Europe, adding: "There are many more looted objects in British museums which were stolen by the Nazis from Jewish families and this is a great step towards righting the wrongs of the Second World War."

Estimates suggest around 20 looted items from Holocaust victims are currently in British museums.

The British Library told the Spoliation Panel - which decides if artwork should be returned - that it was concerned about losing the piece.

But it was rebuffed by the panel, headed by Sir David Hirst, who said the British Library should not be allowed to place any conditions on returning the looted manuscript to Italy.