HOWZAT

The Foundation also proposed a formal loan agreement covering the other 131 paintings, stating that those paintings would remain the gallery for at least the next ten years: the hope was that they would be put on display and not left in the gallery vaults as had happened with some of the works.

But in April 2004 the Gallery told the Foundation for the first time that it, and not the Foundation, owned all the 133 works of art.

The Canadian Gallery was built by Lord Beaverbrook in homage to his homeland etween 1957 and 1959 when it was opened to the public. It has expanded over the years and now owns more than 3000 works of art as well as those in dispute.

Lord Beaverbrook and the UK Foundation between them donated more than 300 works of art to the Canadian gallery between 1956 and 1974; with more than 100 donated by Lord Beaverbook himself. Each time he identified in writing the works he intended to donate by name and artist, insisting on a written acknowledgement.

Times Archive, 1964: Lord Beaverbrook's bequests

A collection of clocks, watches and other personal jewellery is for distribution 'among my old friends and colleagues'

• Lord Beaverbrook: £304,000 in UK

• Obituary: Lord Beaverbrook

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Similarly, each of 200-plus donations by the Foundation to the Gallery were approved by a formal resolution of the trustees and letters signed by each trustee.

But, the Foundation maintains, there are no letters from either Lord Beaverbrook or the Gallery purporting to donate or receive any of the disputed works.

Of the 133 works of art at issue, all but seven were bought by the Foundation using its own funds, it insists. The remaining seven were donated to the Foundation in 1955.

Furthermore, the gallery's own records have stated clearly and equivocally for more than 45 years that each and every work of art at issue is the "property of the Beaverbrook Foundations" (it is also claiming ownership of some 80 paintings from the Canadian Foundation).

Similar acknowledgements statements were on the front of the paintings themselves until the dispute arose.

The Foundation said: "There has been a complete and uniform consensus between the parties for well over 40 years, confirmed repeatedly in writing in every manner imaginable, that the UK Foundation rather than the Gallery owns each and every work in issue.

"That consensus existed well before Lord Beaverbrook died in June 1964."

However the gallery insists that Lord Beaverbrook intended all the artworks to remain as a permanent collection in Canada.

Larry Lowenstein, lawyer for the gallery, has said: "The idea of him building this collection so that suddenly a meat cleaver could be chopped down just doesn't make any sense." A supporter of the gallery has also described the dispute as a "money grab" by Lord Beaverbrook's heirs - allegations expresed and publicly disavowed by the Gallery.

Max Beaverbrook rejects any notion that he or his family stand to gain personally.

He also denied suggestions that the original plan was to sell the Turner and Freud paintings to restore Cherkley Court, Beaverbrook's dilapidated estate in Surrey which was an "entirely unconnected" project.

The property, once the country home of the first Lord Beaverbrook, is being renovated to provide a public museum and conference centre. Visitors to Cherkley included leading literary and political 20th figures including Churchill, HG Wells, Rudyard Kipling, WB Yeats, Bonar Law and Lord Asquith.

The project, he said, had been ongoing for several years and was being overseen and approved by the Charities Commission.

A spokesman for Lord Beaverbrook added: "Every collection reviews its works from time to time and there are sales to finance the maintenance of the core collection. This is normal practice. But at present we do not know which if any paintings might be 'in the frame' for sale."

He added, however, that it would be the Foundation's wish to give wider prominence to the New Brunswick collection than it now had, through the use of exhibitions of the works, say in New York.

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