Official German government documents have revealed that Joseph Goebbels, the Nazi propaganda minister, had close dealings with the father of the man responsible for hoarding 1,406 pieces of stolen Jewish art.

According to German newspaper, Bild, the documents show that Goebbels sold 200 works of art to Hildebrand Gurlitt for only 4,000 Swiss francs (about £2,700).

Today, these artworks - which include, among many other masterpieces, Picasso's Farming Family and Chagall's The Walk - are worth in the region of $1bn (approximately £625 million).

Mr Gurlitt's job was also to sell the looted art around the world in order to raise cash for Goebbels and the Nazi war effort.

At the same time, he used his contacts to buy works from fleeing Jewish art owners.

German authorities have been widely criticised for keeping secret the find that they discovered two years ago in the Munich apartment of Hildebrand's 80-year-old son, Cornelius.

While German authorities have claimed to be unaware of the whereabouts of Mr Gurlitt, an Austrian citizen charged with tax evasion, journalists from the magazine Paris Match say they tracked him down to a Munich shopping centre late last week.

However, the pensioner, described as "elegantly dressed", declined to answer any questions.

In Stuttgart, 22 additional paintings were also seized at the house of Nikolaus Fraessle, Gurlitt junior's brother-in-law. It is thought that Fraessle voluntarily contacted authorities soon after his brother-in-law's hoard became public.