Agreement reached between the United States, Britain and France unlocks a 50-year-old post-war reparation deal that divided the gold up between governments - specifically excluding all claims from individuals whose gold was stolen by the Nazi Reich.
The new deal was announced in Brussels yesterday after a meeting of the Tripartite Gold Commission, which has kept tight control over the German gold holdings since it was set up in 1946.
Last September, after the US and Britain had accused the Swiss of concealing holdings of Nazi gold, the Foreign Office issued a "history note" showing that some of its own hold holdings were suspect.
A month later, a Foreign Office minister told Jeff Rooker, a long-standing Labour campaigner for the gold to be redirected to Holocaust victims, that the three Governments were considering that question. Last night's announcement gave the answer.
Mr Rooker is now an agriculture minister, but the London-based Holocaust Educational Trust, which has campaigned for the remaining Nazi gold to be used to help survivors of the camps, last night welcomed the decision.
"This needs to happen as quickly as possible because the survivors will not survive for very long," it said.
The Commission has already distributed more than pounds 2bn of the gold to the central banks of countries which were looted during the war.
The 5.6 tonnes which are left in bank vaults in London and the US is less than 2 per cent of the gold recovered by the allies at the end of the Second World War.
But Francis Richards, Foreign Office Director for Europe, said in Brussels: "We hope a very large proportion of that will end up in the fund." He added that it was hoped the fund could be established by the end of the year with payments made as soon as possible.Reuse content