It will be a precedent that will apply to museums and galleries

Pierre-Francois Veil, lawyer

The court in the Parisian suburb of Nanterre heard that Williams bought the painting, Portrait of Pastor Adrianus Tegularius by Frans Hals, from the London auction house Christie's for 1.2m francs (�110,000) in 1989.

Williams denied knowing that the painting had been stolen.

The court ordered that the 17th Century painting be returned to its rightful inheritors, the Adolphe Schloss collection.

It was seized during a Paris exhibition in 1990 when Schloss's descendants recognised the work and brought an action against the dealer, a buyer for the prestigious Newhouse Galleries.

'Important'

The decision was welcomed by Pierre-Francois Veil, a lawyer acting for the Schloss estate.

"It's important in so far as it shows that art professionals can no longer claim that they are holding in good faith artworks stolen during the war, which are well known and catalogued," he said.

"Today the judgement is against a private dealer, but tomorrow it will be a precedent that will apply to museums and galleries."

Williams's lawyer, Michael Brooke, said that his client was considering an appeal.