"Waterlilies" was identified as a looted work in July by specialists at the Art Loss Register, a London-based international database of stolen art, after the widow of Rosenberg's son recorded it among a total of 58 works believed to have been looted from Rosenberg during World War Two.

In August, "Waterlilies" was traced to an art museum in the northern French city of Caen.

It is now believed that the work was looted specifically for the personal collection of Nazi foreign minister Joachim von Ribbentrop and was among 40,000 plundered pictures "of French origin" that were returned to the Allies after the war.

The legitimate owners of 2,085 of those works could not be traced and the paintings were then distributed to the Louvre in Paris and various provincial museums, with the acknowledgment that they had been "recovered" after the war.

Rosenberg, who died in 1959, is known to have had five Monets looted by the Nazis in September 1941.

"Waterlilies," one of 80 works that comprise the exhibition "Monet in the 20th Century," has been seen by more than 550,000 visitors to the Boston museum in recent weeks and was scheduled to be transferred to the Royal Academy of Art in London for the opening on January 23.

French authorities will now return the work to the Caen museum, where it will remain until a final decision is made on its ownership.

French officials are said to be worried that a loophole in the British legal system could allow a disputed painting to be sent to a third country if a claim were made while the work was in London.

"Waterlilies" has been included in foreign exhibitions several times over the past 20 years, including a 1995 exhibition in Chicago.