CCTV footage shows the fashionably-attired pensioner examining the fastenings of several different hanging quilts before taking one off the wall, rolling it up and stuffing it in her bulging brocade carpetbag.
Police were told the wanted woman was at a hotel in Te Anau after a bus driver recognised her from his tour party.
She told police it was a spur of the moment theft when a quilt she was touching fell to the floor.
She had been overcome by guilt and dumped the quilt into an Arrowtown rubbish bin.
But Clarke has trouble believing her version of events and reckons the pilfering pensioner has got off lightly.
"It's a pity she didn't get diversion. That's what should have happened along with a $100 donation to the gallery on top of the artist getting paid for her work," said Clarke.
He said a search of the local Arrowtown rubbish bins came up empty-handed. He suspects the quilt was either posted back to England or packed in the woman's suitcase.
Te Anau police were unavailable for comment.
This was the second time in 25 years the Arrowtown museum has been hit by theft. A pistol was taken in the early 90s and never recovered.
