About 1,500 modernist masterpieces – thought to have been looted by the Nazis – have been confiscated from the flat of an 80-year-old man from Munich, in what is being described as the biggest artistic find of the postwar era.

The artworks, which could be worth as much as €1bn (£860m), are said to include pieces by Pablo Picasso, Henri Matisse, Marc Chagall, Paul Klee, Max Beckmann and Emil Nolde. They had been considered lost until now, according to a report in the German news weekly Focus.

The works, which would originally have been confiscated as “degenerate art” by the Nazis or taken from Jewish collectors in the 1930s and 1940s, had made their way into the hands of a German art collector, Hildebrand Gurlitt. When Gurlitt died, the artworks were passed down to his son, Cornelius – all without the knowledge of the authorities.

Gurlitt, who had not previously been on the radar of the police, attracted the attention of the customs authorities only after a random cash check during a train journey from Switzerland to Munich in 2010, according to Focus. Further police investigations led to a raid on Gurlitt’s flat in Schwabing in spring 2011. Police discovered a vast collection of masterpieces by some of the world’s greatest artists.

The artworks are thought to have been stored amid juice cartons and tins of food on homemade shelves in a darkened room. Since their seizure, they have been stored in a safe customs building outside Munich, where the art historian Meike Hoffmann, from Berlin university, has been assessing their precise origin and value. When contacted by the Guardian, Hoffmann said she was under an obligation to maintain secrecy and would not be able to comment on the Focus report until Monday.

According to Focus, Cornelius Gurlitt, described as a loner, may have kept himself in pocket over the years by occasionally selling the odd artwork. Several of the frames in the flat were empty. He is thought to have sold at least one picture – a painting called Lion Tamer by Beckmann – since his flat was first raided by the police. On 2 December 2011, the painting was sold for €864,000 at an auction house in Cologne.

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