pounds 6.5m in war gold returns to Albania 49 years

Albania and the West laid to rest one of their oldest disputes yesterday when France approved an agreement returning pounds 6.5m of gold to the Albanian state. German forces seized the gold during the Second World War, but when the Germans withdrew from Albania and Communist guerrillas took power, the United States, Britain and France confiscated the gold and stored it at the Bank of England.

There it remained, under the trusteeship of a US-British-French commission, throughthe long years of isolation which Albania endured under its late Stalinist dictator, Enver Hoxha.

Britain blocked the gold's return in 1946 after Albania refused to admit responsibility for the deaths of 44 British seamen in a mine explosion in the Corfu Channel. The US had a separate grievance concerning the Communists' seizure of property belonging to US citizens.

With the collapse of Albanian communism in 1991, relations between Albania and the West improved. Britain resumed diplomatic relations with Albania in 1994 and, last Wednesday, named its first ambassador to the Albanian capital, Tirana.Negotiations over the gold began in 1992 and the US and Britain signed agreements last year with Albania, providing for the restitution of half the gold in return for compensation for the British and US claims.

French officials supplied the final touch to the deal yesterday at a signing ceremony in Tirana. Albania expects the gold coins and ingots, weighing 1,574kg, to be back in Tirana next month.