A panel of German legal experts has ruled that medieval artefacts worth £165 million should not be returned to three Jewish families.

A long-running campaign to reclaim ownership of the Guelph collection — which comprises 42 gold and jewel-encrusted Christian artefacts dating from the 10th century — has been conducted by British businessman Alan Philipp, the grandson of one of the original owners.

But the Limbach Commission, a special restitution panel set up by the German government, has decided that the
collection should remain with the Prussian Cultural Foundation, a state-run institution that exhibits the treasures at Berlin’s Bode Museum.

The collection was bought by three German-Jewish families in 1929 but, six years later, the Dresdner Bank, acting on behalf of Nazi leader Hermann Goering, paid 4.25 million Reichsmarks to acquire it.

Mr Philipp, along with other heirs of the families, says the price was far below the market value and that the sale was forced by the Nazis. Goering later presented the treasures to Hitler as a gift.

The commission, made-up of several former German presidents and senior judges, concluded that the sale price was fair and reflected market conditions of the time.

It also argued that the sale could not have been forced as the collection was not present in Germany in 1935 but kept in storage in Amsterdam.

Mr Philipp — who sits on the board of Jewish Care — claims the foundation has obstructed the restitution process and has described its behaviour as “abhorrent”.

He said: “They refused to even speak to my lawyers for three years. Then, in September last year when the panel was originally supposed to meet, the foundation cancelled at the last minute, causing the whole panel hearing to be called off.”

Markus Stoetzel, the lawyer acting for the families in Germany, said he did not think the commission’s decision was a “fair recommendation”.

A spokesperson for the heirs said the commission’s decision was “hardly understandable and has taken us and our clients aback”.

The families must now decide whether to launch a formal appeal against the ruling.