The restored masterpiece Still on Top by James Tissot, worth as much as $8 million before it was butchered in a shotgun raid, is to go back on display at the Auckland Art Gallery next month.

This follows a secret deal by the art gallery to accept $500,000 from the insurers, Royal & SunAlliance, for the $4 million loss of value to the 1874 French oil painting.

Art Gallery director Chris Saines said the settlement was fair.


"Part of that is to do with the astonishing quality of the conservation, repair and restoration which we were able to achieve."

But Mr Saines, with backing from Auckland City Council chief executive Bryan Taylor, has refused to release correspondence between the art gallery, Royal & SunAlliance and council solicitors on the long-running insurance wrangle. The Ombudsman is reviewing this matter on behalf of the Herald.

Last July, Royal & SunAlliance was dumped as the council's insurers, partly for refusing a new policy for artworks and because the company wanted to increase premiums and excess levels.

Papers of a general nature about the painting released to the Herald under the Official Information Act reveal that the painting had a market value of $US3.5 million, or nearly $8 million at the time of its theft on August 9, 1998. It was insured by the council for $2 million before it was stolen.

The value was based on opinions from the major international auction houses Sotheby's and Christie's and a leading Tissot scholar from the United States, Michael Wentworth. The auction houses said recent interest by Elton John and Lord Andrew Lloyd Webber in the Victorian painting market for Tissot had made the market more "aggressive."

Sotheby's and Mr Wentworth thought the work had suffered a loss of about 50 per cent of its value.

The insurers have also paid $140,000 for the two-year restoration of the painting, which was badly torn when career criminal Anthony Sannd jemmied it from its frame, rolled it up and fled on a motorcycle.

He was jailed for nearly 17 years for that robbery and others involving a security van and a bank.

The restored work, measuring 88cm by 54cm, will be unveiled at the gallery on July 12 at a special exhibition including other Tissot paintings and works on loan from New Zealand and Australian collections.

As well as Still on Top, two other major Tissot oils, Waiting for the Train (Dunedin Public Art Gallery) and The Widower (Art Gallery of New South Wales), will be shown.

The gallery's principal conservator, Sarah Hillary, has led a sophisticated restoration project involving research and analysis, documentation and meticulous physical repair and retouching of the painting's damaged surface.

"When Still on Top returns to display I think the public will be utterly surprised," Mr Saines said. "The new restored, revarnished and reframed work looks just brilliant."