New York Attorney General, Andrew Cuomo, is forcing a hedge fund manager who advised his clients to invest with Bernard Madoff to sell off his $310 million (£189 million) art collection.

The collection is rumoured to be among the best in the US, which includes Rothko canvases and Giacometti sculptures. He is alleged to have encouraged clients to invest their money with Madoff, who has been sentenced to 150 years in prison after masterminding one of the biggest frauds of all time.

Mr Merkin, who is one of several businessmen named by prosecutors as “feeders” to Madoff, allegedly made $470 million in management fees from $2.4 billion in bad investments.

He is also being sued by Irving Picard, the trustee for the liquidation of Madoff’s assets.

Mr Cuomo said yesterday that the sale to an unidentified single buyer should yield about $192 million after taxes. The money will be held in trust until it is decided how much of it should be used to compensate investors.

He added: “We believe it is only fair that Mr Merkin liquidate his valuable art collection, which he purchased with the fees he earned from his investors, and keep the proceeds in escrow pending resolution of our lawsuit.”

Andrew Levander, lawyer for Mr Merkin and his wife, said: "The Merkins believe the lawsuits are without merit.”

Mr Cuomo's office has frozen Merkin's assets and sued him on charges of civil fraud for allegedly telling investors that his "feeder fund" was diversified when all their money was actually going to Madoff.

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