London, the stolen art capital of the world, dealers in human remains and Nazi loot

Britain must introduce a series of measures to combat the growing trade in illegal artefacts, from the robbing of archaeological sites in the developing world to the return of objects stolen by the Nazis, a new report by MPs says.

Britain must introduce a series of measures to combat the growing trade in illegal artefacts, from the robbing of archaeological sites in the developing world to the return of objects stolen by the Nazis, a new report by MPs says.

Cultural Property: Return and Illicit Trade, by the Select Committee on Culture, Media and Sport, says stolen items,including human remains, have become so embedded in Britain's cultural fabric that museums and institutions are increasingly going to face claims for their return.

It also demands swift government action to ensure the return to their original owners of works looted by the Nazis, saying legislation should be changed so that claimants' wishes outweigh those of the museums in which many works are still housed.

"It would be absurd if restitution were not possible in these circumstances due to the dilatoriness of ministers in the Department for Culture, Media and Sport," it concludes.

The report notes that the worldwide trade in illegal artefacts, estimated as worth £3bn a year, is second only to the black market of illegal drugs and weapons.

The scale of it is staggering. The MPs heard evidence that about 1,000 pieces of pottery, worth some £7.5m, are smuggled out of the Mayan region of Central America every month.

Vivian Davies, a British Museum expert, told the committee "massive destruction" was being done to archaeological sites in Egypt every week. "Objects are finding their way out through various laundering systems," she said.

The market is hugely lucrative - in 1998 art market sales in the UK totalled £3,288m. Britain's auction houses and trade organisations are keen to stress that their success rests on their good reputation, but the committee heard allegations that London was an important centre of the illicit trade in cultural property, and that auction houses were unknowingly used by art thieves to "launder" pieces.

Charles Hill, of the British Art Market Federation, and a former head of the Metropolitan Police's arts and antiques squad, told the committee: "London is a centre of the stolen art market," although he said that the capital's role had been exaggerated.

At present, there are no import controls on cultural property entering Britain unless they are subject to other controls, for example in relation to firearms - a position that many in the museums trade finduntenable.

"It is a scandal that it is a thieves' kitchen, or it could be so described, the freedom with which illicit antiquities may enter this country and it is not even officially disapproved of in any way," Lord Renfrew of Kainsthorn, Professor of Archaeology at Cambridge University, told the committee.

It recommends a national database of stolen antiques should be set up and the illicit trade in foreign cultural goods outlawed as part of a clean-up of the London art market.

The MPs are recommending that the trade in cultural goods stolen or exported illegally from abroad should be made a criminal offence. Existing regulation was too lax, they said. "It is unacceptable that this country continues to have no specific criminal sanction against the trade in cultural objects which it is known have been illegally excavated or illegally exported from another country."

But it is Britain's museums and galleries that are likely to have to face the consequences of the illicit trade. The report notes that in the past Britain's museums "have not been as careful as they should have been" in ensuring that objects which they acquired were not stolen, illicitly excavated or illicitly exported.

The report notes that the scale of claims for return from museums in Britain is likely to increase, pointing to recent examples such as the Lakota Indians' demand against Glasgow Museums to take back the Ghost Dance shirt. It proposes measures to mediate between claimants and institutions, especially regarding the sensitive issue of human remains.

But it is on the issue of Nazi spoils that the MPs call for swiftest action, calling for an end to legislative barriers that prevent museums handing over work to claimants. Where there is a conflict of interest, they say, the wishes of the victim must come before those of the museum.