A Swiss art gallery will be allowed to keep a Kandinsky painting looted by Nazis after reaching an out-of-court settlement with the artist's family.

The deal brings to an end the long-running dispute between the Ernst Beyeler Foundation and the heirs of Sophie Lissitzky-Kueppers over Wassily Kandinsky's Improvisation Number 10.

This settlement means that the turbulent history of this painting has a happy end

Ernst Beyeler

The painting was confiscated by Nazi Germany as degenerate and later sold to Mr Beyeler.

"Today's positive result would have been welcomed by my mother," her son Jens Lissitzky said on Tuesday.

"Even then all those years ago, my mother recognised and treasured this picture as a milestone in 20th Century art."

Beyeler gallery

In a joint statement, Mr Lissitzky and Mr Beyeler said the prominent Russian artist's painting would remain in the possession of the Beyeler Foundation and its museum in Riehen, on the edge of the northern city of Basel.

The 1910 work was part of Ms Lissitzky-Kueppers' collection of some 13 paintings she lent to the Provincial Museum in Hannover in 1926, before she married Kandinsky. El Lissitzky.

Hitler branded Kandinsky's work 'degenerate'

In 1937, the Nazis seized the entire collection, including the Kandinsky painting, as part of the Nazi "degenerate art" campaign.

In the wake of her husband's death in 1944 and under pressure from the Stalin regime, Ms Lissitzky-Kueppers was exiled to Siberia. She died there in 1978.

Painting sold

Ferdinand Moeller - a German art dealer notorious for dealing in art confiscated by Adolf Hitler's regime - obtained the painting during the war years and sold it to Mr Beyeler, a Swiss collector, in 1951.

In their statement, Mr Beyeler and Mr Lissitzky said they had agreed to remain silent on the exact terms of the settlement, which was reached on 27 June.

"I am glad that this unique painting will remain on public display - a goal to which I have worked for several decades," Mr Beyeler said.

"This settlement means that the turbulent history of this painting has a happy end."