A new law to enable British museums and galleries to return looted art to its rightful owners rather than pay compensation should be law by the autumn..

The Holocaust Restitution Bill’s passage onto the statute books will clear the path for as many as 20 claims for the return of artworks in British collections by the end of the year.

The Bill passed the committee stage in the House of Commons on Wednesday with only minor amendments.

It returns as the first item of business on June 26 for its third reading before going to the House of Lords, where it will be steered through by Lord Janner.

The Bill’s promoter, Hendon Labour MP Andrew Dismore, said: “This is a very important piece of legislation. At the moment, museums and galleries do not have the power to return looted or spoliated art in national collections to the proper owners.

“The owners have to accept compensation. The Bill will change that. It will give museums and galleries the power to return looted art.”

He explained that a claim would be made to the Spoliation Panel, which is part of the Department for Culture and Sport. It then makes a recommendation to the Secretary of State, who will decide whether to accept the claim.

If it does, the matter then goes back to the museum or gallery trustees for a final decision on whether to return the artwork.

MPs praised the contribution of the Commission for Looted Art in Europe, whose co-chair Anne Webber said: “The government committed to do this nine years ago and it has taken this long to reach this point.

“It is a great step forward, especially with everyone working together to make it happen.

“People have waited a long time for justice. The Bill’s passage is very timely with a major international conference on Holocaust restitution in Prague starting on the day the Bill receives its third reading.”

Board of Deputies’ chief executive Jon Benjamin, who has been advising on the Bill with Ms Webber, said: “The warm plaudits for Andrew Dismore are well deserved.

“This is a significant piece of legislation that, as well as its practical effects for victims of the Holocaust and their heirs, signals that some wrongs can still be righted even after so many years.”