A 17th-century painting had to be withdrawn from a Christie’s auction after the Polish Embassy in London revealed that it had been looted by the Nazis.

Pieter de Grebber’s Study of a Reading Man will be returned to the family of Abe Gutnajer, an antiques dealer murdered in the Warsaw ghetto in 1942 by the Nazis, who confiscated his property.

The painting is listed in the catalogue of Losses of Polish Culture: Wartime Losses – Foreign Painting, published eight years ago in Poland.

A spokeswoman for the Polish Embassy said: “After the auction was stopped, the Polish foreign service found the heirs of the legitimate owners in the USA and opened negotiations with Christie’s and the consignor of the painting to determine the future of the work. After long negotiations, a fair and just solution was reached, without the need of resorting to costly litigation.”

The painting will now be sold by Christie’s on April 25. It is estimated to fetch between £20,000 and £30,000.

The spokeswoman added: “This agreement offers a good opportunity to recall the fate of the painting’s owner, in many ways typical of the Jewish community of Warsaw during the Second World War.”

Gutnajer came from a well-known Warsaw family who, since the 1890s, had traded in antiques. In 1915 he set up in business selling paintings, including works by Dutch and Flemish artists of the 17th to 19th centuries. He also staged auctions of sculpture, furniture and other objects. After the Germans occupied Warsaw, the city’s Jews were kept in a ghetto until sent to death camps. Little is known of Gutnajer’s life in the ghetto except that he was extremely ill. In 1942 he was murdered, along with the rest of his family and a Polish doctor, a Professor Raszeja, who had come to treat him.

The only member of the family to survive was his son, Ludwik, who was with the Polish Armed Forces, fighting alongside the Allies. After the war Ludwik moved to America, where his wife and two children still live.

Next Thursday the Polish Embassy in London will announce that the painting is being returned to the family. The handover, to be attended by Christie’s and the Polish Ambassador, comes eight years after the Government set up a committee to resolve disputes over art and antiques looted during the Nazi era that may be in national collections in Britain.

The Spoliation Advisory Panel, made up of lawyers, historians and specialists in the art market, examines claims by survivors of the Holocaust or their heirs. In 2001 the Government agreed to pay £125,000 compensation to three elderly Londoners for a painting that their mother had to sell during their escape from the Nazis. The painting, the 1710 View of Hampton Court Palace by Jan Griffier the Elder, had been in the Tate gallery since 1961, when it was bought in good faith.

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