PARIS (AFP) - A drawing by Edgar Degas that was seized by Nazi Germany in 1940 and returned to its rightful owner in May fetched 462,500 euros (S$688,000) at auction on Sunday, organisers said.

An Italian collector purchased the 1898 drawing, titled "Trois Danseuses en Buste" by telephone, according to the Osenat auction house in Fontainebleau near Paris.

The work had been valued at between 350,000 and 450,000 euros.

The drawing was confiscated in August 1940 from the Paris home of Maurice Dreyfus, a doctor.

It was found in 1951 in a closet of the former German embassy in Paris, and given to the Louvre Museum before it was identified as the property of the Dreyfus family.

"We received a gift from heaven when we learned that they found the Degas drawing," Dreyfus's daughter Viviane told AFP. "It's as if my father gave us a gift from beyond the grave. We are very moved."