The three people at the centre of the inquiry, which centres on the archives of the Tate Gallery, allegedly tried to tamper with records at the British Council in order to sell a forged painting by the British artist Ben Nicholson. The three cannot be named for legal reasons.
Prompt action by a British Council archivist managed to alert the buyer and prevent the sale of the work, which was wrongly claimed to have been exhibited in Japan.
Several people have been arrested and released on police bail, pending further inquiries, as part of the international investigation. The fraud encompasses modern masters such as Nicholson and the Swiss sculptor and artist Alberto Giacometti.
Scotland Yard's Arts and Antiques Focus Unit is investigating evidence of the widespread sale of forged paintings, authenticated by allegedly altered records.
The British Council had been approached in writing in February 1990 by a man, using a pseudonym "John", who asked to see records of an exhibition of Nicholson work that had travelled abroad in 1954. His letter allegedly implied an association with the Tate Gallery, although it is understood that the Tate is in no way implicated in the fraud.
John, and subsequently a female "researcher", both visited the British Council archive to undertake research on Ben Nicholson and were given access to files.
Relations between the archivist and the female researcher were said to be "extremely cordial" until the archivist returned from lunch one day to discover that the researcher had gained access to archives in her absence and was holding files which she had not been given.
Shortly afterwards the archivist was approached by a prospective buyer, who showed a report which stated that the work in question had been included in a Ben Nicholson exhibition in Japan. It included "misleading" documents from files which had been photocopied.
"We were able to produce photographic evidence that although possessing some detail, [John's] work was not in fact the work in question," said Andrea Rose, head of art at the British Council. The archivist subsequently contacted Scotland Yard, which yesterday refused to comment.Reuse content