The Arthur Delaney painting acquired for a second time by Neptune Fine Art. The picture will be on view for a period at their new London gallery on Kensington Church Street, which is due to open before Christmas.

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This time, Mr Smith paid just £13,500 for the Manchester street scene when it was offered at Cheshire auctioneers Adam Partridge on October 28, with an estimate of £5000-10,000 and correctly catalogued as by the Manchester artist Arthur Delaney (1927-1987), a follower of Lowry.

Mr Smith had been tricked into buying the picture during a meeting at the Ritz hotel by the self-styled "Lord" Maurice Taylor of Congleton, Cheshire. Taylor had purchased the oil on canvas in 2004 for £7500, knowing it to be by Delaney, but had already deceived Bonhams into issuing a £600,000 insurance valuation on the painting which he used to persuade Smith.

At Adam Partridge, the Delaney painting was sold alongside two genuine Lowry pictures and other works seized by police from Taylor's home, Brownlow Hall, near Congleton.

In March this year Taylor was sentenced at Chester Crown Court to three years' imprisonment after denying six counts of fraud and one of forging an invoice to cover his tracks. He was subsequently ordered to pay back £1,157,300, which included £230,000 to Mr Smith and £8000 prosecution costs. If he fails to do so, he faces a further ten years in prison.

"We wanted it and we bought it," said the Derbyshire-based Mr Smith, following the auction. "We would have paid whatever it took, but now we've got it we don't intend to sell it. We'll hang it somewhere where we'll be able to see it every day and have a good laugh."

By Anna Brady