It was the exhibition that almost did not happen. The large painting of dynamic, nude bodies holding hands and dancing in a circle against a bright blue and green background was a hair away from staying in the State Hermitage Museum in St. Petersburg, never to be seen in London.

But a last-minute decision and a quick amendment to British law meant that Henri Matisse's "The Dance," along with 119 other works from Russian state museums, was allowed to appear at the Royal Academy's "From Russia" exhibition in January, to rave reviews from the British press.

This happened despite the fact that some of the works were looted from the collections of entrepreneurs Ivan Morozov and Sergei Shchukin after the October Revolution. And despite the fact that the heirs came to London for the exhibition and are seeking compensation for the art that they could have inherited. Among the contested works is the Matisse painting, which was owned by Shchukin.

Since the end of World War II, the nuances of lost and stolen art have been a source of controversy in Russia. Russian state museums have kept looted art, some of it acquired after the revolution, some of it taken as reparations for World War II.

At the same time, Russia wants its art and valuables back from abroad. The 46,000 art works documented as missing from state museums since 1945 have been electronically catalogued by the Federal Culture and Cinematography Agency on a web site called LostArt.ru, in the hope they will find their way back to the museums that owned them. There are over 1.1 million objects listed on the website as lost; these include rare books and archive files as well as works of art.

"The main point of the web site is to get a picture of the losses in Russian art, to see if it's possible to get the lost works back and to see if these works exist in Russia or overseas. This has been very tedious work," the head of the agency, Mikhail Shvydkoi, said at a news conference last week.

The online catalogue of lost art is an extension of a printed version that was published by the agency in 1998. A total of 160 museums and 4,000 libraries were damaged by German forces between 1941 and 1945. Some were all but destroyed, and some, such as the Peterhof estate in St. Petersburg, are missing a substantial number of works.

The Tretyakov Gallery is missing 37 paintings, which is odd because the German army never entered Moscow. Bloomberg reported that 38 works from the Tretyakov were on loan to Soviet embassies in Europe and disappeared when the war broke out. One of these is a painting by popular landscape artist Ivan Shishkin titled "Pine Trees Above the Gorge."

Mark Stephens, a British art and cultural heritage lawyer, is supportive of Russia's attempts to reclaim its art. "I think it is completely their right to get their art back, and I hope they succeed," he said by telephone from London.

Stephens said that despite the complex issues involved, there is a simple principle behind the claims for lost art. "If I went to a pawnshop and saw something that previously belonged to me, I could take it home and not compensate the pawnshop."

In the last 10 years, Russia has recovered many works from German state museums. "Mikhail Yefimovich [Shvydkoi] and I flew the last 10 that were recovered from a Berlin museum over in the presidential plane," Anatoly Vilkov, the deputy head of the Federal Inspection Service for Mass Media, Telecommunications and the Protection of Cultural Heritage, said at the Lost Art news conference.

Vilkov said works from German state museums have been returned to Russia "without any questions." He said valuables that belonged to Russia before World War II have been recovered from 22 countries, and that he has information that the missing works are in private hands in Europe and the United States.

The Russian government is much more possessive of the valuables that it gained over the last 90 years. A law exists that prevents the reclamation of looted art that has been appropriated by the government. After 1917, almost everything of value belonged to the state. The only time that people of other nationalities have a slight chance of recovering it is when the art goes overseas.

It is perhaps for this reason that an exhibition of ancient art last year called "Era of the Merovingians: Europe without Borders," which was a combined effort by four museums -- the Pushkin Museum of Fine Arts, the Historical Museum, the State Hermitage Museum and Berlin's Museum of Pre- and Early History -- was shown in Moscow and St. Petersburg, but not in Berlin.

Stephens wrote an article in The Times of London expressing his outrage at the fact that the Royal Academy held the "From Russia" exhibition. "It is clear, then, why the Russians are so nervous about sending abroad stolen goods. It is much less clear why the Royal Academy should be content to knowingly receive and display stolen goods and furthermore why the [British] government would set about preventing the true owners from recovering them," he wrote.

Like most art taken over by state institutions after 1917, the paintings belonging to Shchukin and Morozov were stolen and do not officially belong to the Russian state. In accordance with international law, the art can only be nationalized by compensating the heirs of the collectors for their loss. Today the paintings are worth millions of dollars.

In Britain, anti-seizure legislation was rushed into effect in December to prevent the works exhibited at "From Russia" from being reclaimed.

At the news conference, Vilkov spoke of the 250,000 works taken from Germany as reparations for World War II, which are kept in the archives of state museums in Moscow and St. Petersburg. "These will eventually be distributed amongst the regional museums that have suffered," he said.

There are 2.5 million objects missing from Germany that are believed to be in the former Soviet Union, Gunter Schauerte the deputy general director of the state museums, in Berlin said in a telephone interview on Thursday. Of these, anywhere from 140,000 to 600,000 artworks come from museums in Berlin alone.

"I understand that the Germans destroyed a lot of Russian culture during the WWII. I understand that compensation is necessary, but to swap the destruction of one culture for the destruction of another culture -- is that the right way to compensate?" Schauerte said.

"The most important thing at the moment is first to understand which museum has what. We don't even know if some of these objects exist anymore. The only time we see them is when the museum decides to display some of them, but otherwise they are kept in storage," he said. "Talks on restitution come much later."

In 1954, the Hague Convention for the Protection of Cultural Property made it illegal to use "cultural property" as war reparations, and Russia gave back 1.9 million objects in 1958 to East Germany. A festival will be held in Berlin, 50 years to the day, as a sign of gratitude.

Irina Antonova, the director of the Pushkin Museum of Fine Arts, attended the news conference to express her support for the LostArt.ru web site. Her museum is currently holding some of the aforementioned works from Germany and also sent some of the works that went to the Royal Academy this year.

Stephens said that Antonova is in a particularly difficult position. "She has to try and recover work for the Pushkin -- that's part of her job. And the UNIDROIT [International Institute for the Unification of Private Law] convention gives the right to reclaim and the obligation to hand over to the Pushkin anything stolen."

At the same time, Russian laws prevent her from removing works from the Pushkin Museum even if it is to return them to previous owners. Stephens said that similar laws exist in Britain, but they are currently being reworked "to fall in line with modern international standards by which everyone agrees to return."

"I don't think her [Antonova] hypocritical -- I think she is an advanced thinker," he said. "As soon as the Russian government sees work returning and understands that its museums won't be denuded, it will also change its laws."