A scheme that compensates victims of the Holocaust for their financial losses during the war may be scrapped by the government in a bid to save taxpayers’ money.

Under Winston Churchill’s wartime government, British-based savings and properties belonging to Nazi victims in Germany, Japan, Italy and occupied Europe were seized to stop them falling under enemy control.

In 1999, the Enemy Property Payment Scheme was launched to recompense the families of those who incurred such financial losses, enabling them to make claims and win compensation based on the value of the asset, increased by inflation.

But Business Secretary Vince Cable has revealed he may now end the scheme, which has paid out £23 million to more than 500 families since it began, to cut running costs of £65,000.

According to the government, the number of claims has significantly fallen in the past 15 years – from more than 900, to only 11 last year. For this reason, it said it brought “into question relative value for money for the taxpayer”.

Mr Cable’s plans have outraged Jewish groups, such as the Association of Jewish Refugees, who said the suggested closure of the scheme “would be a travesty of justice and an unnecessary stain on the British government’s otherwise leading reputation in the field of post-Holocaust issues”.

A Business Department spokesperson said they welcomed other suggestions before March 7, including keeping the scheme open on a lower resource basis.