A Japanese museum is refusing to return a £1 million Joshua Reynolds painting stolen from a Sussex home in 1984 unless it receives “just and reasonable compensation”.

The oil-on-canvas portrait was painted in about 1780 but stolen from the home of Sir Henry and Lady Price with a number of other works of art and family heirlooms.

Four years after the theft, the painting is thought to have been auctioned at Sotheby’s in London to an art dealer, who sold it to the Tokyo Fuji Art Museum in 1990.

The family of the late Sir Henry - a businessman from Yorkshire who founded Fifty Shilling Tailors stores in 1905 and later became a well-known philanthropist - engaged Art Recovery International to locate the painting and it was subsequently found in Tokyo.

But officials of the museum have refused to meet with the original owners of the painting and demanded payment of “a reasonable sum” before even engaging in discussions over the stolen work, a demand that is a contravention of ICOM guidelines.

Akira Gokita, director of the museum, did not respond to a request from The Telegraph for a comment, but the Tokyo law firm representing the gallery confirmed that the museum would be seeking a pay out.