The Russian government hopes that the new district will become a showcase for Moscow, a city that is undergoing its most radical transformation since the 1930s. The land Sir Norman will help reshape is currently home to the Soviet-era Rossiya Hotel, one of the USSR's most hideous landmarks. The Austrian government had hoped to save the works for the nation but has decided it cannot afford them.. The British architect Sir Norman Foster is to play a lead role in resurrecting Moscow's oldest and most central district, a stone's throw from the Kremlin's red-brick walls, the undulating cobbles of Red Square, and St Basil's Cathedral. The13-acre riverside site is regarded as one of the most desirable pieces of development land in the world and was first settled in the 13th century. The family's heirlooms were seized by the Nazis and had hung at the Belvedere Museum in Vienna. On return, Mrs Altmann immediately lent the paintings to the Los Angeles County Museum of Art, but intends to sell them. She had pursued an eight-year battle to the US Supreme Court.

The works, now worth £170m, included a painting of her aunt, Adele Bloch Bauer. Last month, the Austrian government restored five works by Gustav Klimt to Maria Altmann in California, the heir of an Austrian family forced to flee the Nazis in 1930s. These included pieces such as Lucas Cranach's Venus and Cupid and Rembrandt's Two Philosophers. Works regarded as "degenerate", such as those by Modernists, were exchanged for more acceptable pieces or sold on.When the war was over, the European art market boomed on the back of these operations.One example of the claims that followed was the case of Austria v Altmann.

He appointed agents throughout Europe to scout for him and accumulated around 2,000 works of art between 1939 and 1945. Coming from a wealthy family and with a love of art, he took the opportunity created by the war to acquire thousands of objects confiscated from museums, art dealers and private collections.Particular favourites were female nudes and Gothic art, but his collections also included Roman artefacts, 19th-century German paintings, jewellery and tapestries. "That would be our wish." The artworks looted by Hitler's henchmen Hermann Goering, founder of the Gestapo, led the Nazi plunder of art. "The picture for us is not about money."Seeing the work had been incredibly emotional, she said.