The greatest art heist of our time...

The entrance to Boston's Isabella Stewart Gardner Museum is not perhaps the most memorable for visitors familiar with the world's grandest art institutions. The portico is small. There are no epic canvases proclaiming the collection within. It's more like a small stately home than a fortress of global culture. But not only does this unassuming museum boast a handful of America's, indeed the world's, finest artistic treasures - works by Raphael, Velázquez, Michelangelo, Degas, Botticelli, Piero della Francesca, Titian - it was also the site of the greatest single art theft of modern times.

The break-in occurred on the night of 18 March 1990. St Patrick's night is one of the biggest calendar events in this solidly Irish city, and even after midnight the festivities were still in full swing. In a normally quiet suburb of the city, two men dressed as police officers approached a side entrance to the museum. They banged on the door - there'd been a disturbance nearby they said: could the guards open up and let them check inside?

Museum security rules dictated that the guards refuse. Sadly for Boston and for lovers of art everywhere, they didn't. Within a few minutes they found themselves bound and gagged, and in an 80-minute spree, the thieves seized a Manet, several Degas sketches, three Rembrandts, including the artist's only known seascape (pictured right), and Vermeer's The Concert. The total haul is now valued at up to £300m. The Vermeer alone is considered the world's most valuable stolen artwork.

These days, the Gardner's Dutch room has a haunting atmosphere, dominated by three permanently empty frames. The museum director, Anne Hawley, is lyrical about the loss. "It's like a death in the family," she says, "there's such sorrow." She had been in her post only weeks when the pictures were taken. Leafing through an old catalogue, she shows me a photograph of the missing Vermeer - three figures positioned around a harpsichord. "It's just a magical picture," she says. "This combination of people lost in music but yet totally silent to us ... I often wonder where they are now, these people making music."

She's not the only one. In the United States, the hunt for the Gardner's lost art has inspired countless newspaper and magazine articles, TV documentaries, even a thriller novel. f Making contact with the individuals involved, I feel like a gate-crasher at a wedding. "I am very competitive about it," says Steve Kirkjian, the Boston Globe's senior investigative reporter. "The Globe chases down - I chase down - any will-o'-the-wisp that comes our way. It's still one of Boston's best mysteries."

To attempt to unpick the mystery, you need to begin with the events of the summer of 1997. A little-known antiques dealer, with a not-inconsiderable criminal record, named William Youngworth III, stepped - he says he was dragged - from the shadows of a Boston suburb. Youngworth had been fingered by FBI investigators as someone who might have knowledge of the paintings' whereabouts - although as he'd been in jail at the time of the heist, he was not a suspect. Rather than clam up or leave the talking to his lawyer, he started spilling his story - and it was quite a story - to Boston's second daily paper, the Herald.

Claiming he held the key to the artworks' return, Youngworth arranged for a Herald reporter, Tom Mashberg, to be taken in the middle of the night to a New York warehouse. There he was shown by flashlight a painting which bore a strikingly close resemblance to Rembrandt's Storm on the Sea of Galilee. "I was only able to inspect it briefly - for a couple of minutes," Mashberg says. "But I kept a mental note of how it looked, how the canvas looked, how the cracking of the painting appeared."

It was enough for the Herald to pronounce to the world: "We've seen it!" By now the US Attorney's office was paying close attention. Youngworth was summoned to its Boston HQ. "We were prepared to take a step at a time to see if he was on the level," recalls Donald Stern, Boston's US Attorney at the time. "But we weren't prepared to buy what you'd call a pig in a poke - the full package." It's not hard to see why. The package would have represented a high price for any law-maker. Not only did Youngworth expect to receive the US$5m reward that the museum had posted, he was also refusing to implicate anyone else in the crime, and demanding full immunity from criminal charges that might arise from brokering the deal. Furthermore, he wanted the early release from jail of his friend, Myles Connor - a man whose name sent shivers down the authorities' collective spines.

Since the 1960s Connor been the lead singer of a local band, Myles and the Wild Ones - supporting major acts like Roy Orbison by night, stealing art by day. When I met him, he was explicit about his criminal past, boasting that millions of dollars worth of art had passed through his hands over a 20-year career - most notorious of all the theft of a Rembrandt from Boston's Museum of Fine Arts in 1975. Connor had been about to face trial at the time on a separate charge of art theft, but escaped prosecution by offering the Rembrandt in return for his freedom. Using crime to buy favours was a tried and tested tactic.

With Connor in the equation, the US Attorney stuck to its line: any negotiation must begin with cast-iron proof of the dealers' credentials. The next clue arrived via the Boston Herald's newsdesk again, in the form of a small phial of paint chips. Forensic examination by both the museum and the federal authorities seemed to demonstrate their authenticity - the chips could be traced to 17th-century Holland.

The Gardner Museum seemed convinced that Youngworth was on the level. There were reports in the media of a secret meeting in New York between Youngworth, Anne Hawley and a leading museum trustee, at which a pledge was made to honour the reward, if the paintings could be retrieved. What appears to be a private recording of the discussion, made public this year, indicates the level of the museum's enthusiasm - promises were apparently made to exert the political influence of the local Senator, Teddy Kennedy, on Youngworth's behalf. And a goodwill payment of US$10,000 is alleged to have been handed over.

The US Attorney, however, was not so ready to play along. Contrary to Youngworth's alleged claim that the chips had come from Rembrandt's Storm, said Stern, the paint was lacking a necessary veneer. It couldn't have come from a Rembrandt. Youngworth himself denies ever ascribing the chips to that artist, suggesting that instead they'd come from Vermeer's The Concert. All the same, Stern called off the negotiations, pronouncing Youngworth a fraud. Within weeks he was back in jail - on an unrelated charge of possession of a stolen vehicle. Connor returned to his cell in Pennsylvania, and the trail of the world's most prized missing art collection went cold.

For those connected with the case, the failure of the 1997 negotiations represented a strange anti-climax. The position taken by Donald Stern could hardly be challenged on ethical grounds. As the celebrated defence lawyer and sometime Gardner trustee Alan Dershowitz points out, "It's a shortsighted policy. If we'd paid for these pictures there'd be 10 more pieces of art stolen in the next decade by people who say: 'Look, they stole the Rembrandt, they got rich, why not us?'"

But that hasn't dissuaded a steady convoy of journalists, private investigators and, indeed, the FBI from returning to both Youngworth and Connor in the belief that they still have crucial evidence of the paintings' whereabouts.

I'd first spoken to Youngworth in the summer of 2000, in a phone interview to his prison cell towards the end of his three-year sentence. Hearing him speak, it's immediately obvious that he's a highly intelligent and articulate individual - not the mere "small-time conman" portrayed by some newspapers. On the other hand, he can be erratic, prone to bouts of rage that can make his arguments and his agenda hard to follow. f

During our first conversation he'd railed against a wide array of perceived enemies, from Tom Mashberg to the US Attorney to those Boston police officers he now claimed had framed him. But he hadn't provided anything new about the art. Three years on, however, things had changed. When he renewed e-mail contact with me last autumn, he was promising much more - revelations, he said, that would throw a new light on the Gardner mystery. Eventually a meeting was arranged, this time at his home in Springfield, Massachusetts.

What he was offering was indeed intriguing. Having discussed the matter with certain associates, he said he could reveal for the first time the identity of the man who in the early 1990s had taken possession of the pictures. That man was one of the Boston Irish Mob's most powerful figures at the time, the late Joe Murray. Murray had made his fortune smuggling drugs, but was better known to the world as the sometime owner of the Valhalla, an American-registered vessel that in 1984 was seized by British customs attempting to deliver several tons of weapons to the IRA. What did a powerful mobster like Murray want with stolen art? "I think Joe Murray came into possession of the pictures because he was a man with power, influence and money," says Youngworth. "Joe approached a politician and tried to secure the release of one of his friends with these items."

Youngworth says the failure of this deal had made the artworks difficult to shift, and they'd stayed in Murray's possession up to his death (he was gunned down by his wife in 1992). After that, others had inherited the collection - people who'd eventually been willing to involve Youngworth in the horse-trading that took place in 1997.

While Youngworth's claims are impossible to prove, new research has unearthed the testimony of one former FBI agent who asserts that shortly before his death, Murray wanted to trade some unspecified artworks. It has long been suspected that a major heist such as this could not have been carried off without the Mob knowing about it. Since 1990, some investigators have maintained the possibility that the heist, through the likes of mobsters like Murray, might have been the work of Irish Republican operatives. The Provisonals had, after all, been linked to a series of art thefts in Britain and Ireland in the 1970s and 1980s - most famously in Russborough and London's Kenwood House in 1974. Youngworth, though, denies such a straightforward connection.

"One could argue there was an IRA link, but I can absolutely tell you that the architect of this was not in Ireland. Let's just say people sympathetic to the IRA were involved."

My next question was obvious: where are they now? As with so many of his answers, Youngworth selects his terms carefully, dissociating himself from firsthand knowledge: "Well let's just say they're closer to you than they are to me. My information is that they're everywhere from Dubai to Russia. I have no idea if they'll ever come back."

Youngworth's contention is that since 1997, the collection has been split up, with individual paintings going to collectors and organised gangs outside the US - all except Rembrandt's A Lady and Gentleman in Black. "My information is that it's been rolled and unrolled so often that the paint was coming right off the canvas," he says casually. "It looked like a box of cornflakes had come dumping out the tube it was held in. I would say the painting was now absolutely useless, and has been destroyed."

When I share that last bombshell with journalists in Boston, most just shrug. For many of them, seven years after his grand entrance on the Gardner stage, Youngworth's credibility has expired. "He's just a conman and a liar," says Harold Smith, a veteran insurance investigator who is devoting his retirement to the pursuit of the collection. "If he'd had control of the paintings all this time, he would have found a way to get them back, and land the reward. There's always a way."

But not everyone agrees. For one thing it's not easy to see how a conman would gain financially from what Youngworth's done, unless he genuinely did have some access to the art. After seven years, the only significant funding he's known to have received was that one alleged payment from the museum, money more than offset by the collapse of his business and his legal costs. What's more, post-1997, the legal regime was known to be stacked against him, making any deal in which he made money almost impossible to imagine.

Producers at ABC Television who have followed Youngworth's story had enough faith in his version of events to give him a half-hour slot earlier this year, during which he provided a detailed description of what was on the back of the canvas of Rembrandt's Storm. What emerged also in that programme was the new willingness on the part of the US Attorney's office to offer immunity to known felons like Youngworth, should they have information leading to the return of the art.

That offer could yet bear fruit. Youngworth says he is still in a position to track down those he believes are controlling the paintings. "If it's money that solves the problem, I believe I could do it," he says. "I don't believe anyone has fallen sufficiently in love with an object f that they wouldn't part with it for the right price."

The museum though - perhaps burnt by previous failures - now seems unwilling to deal with Youngworth. He might face other challenges anyway in pursuing the art overseas, where Boston's new legal regime does not apply.

In the final weeks of my investigation, this point was made doubly apparent by dramatic new revelations linking the art firmly to this side of the Atlantic. We made contact with a well-established police source in the London area - a man, known simply as Colin, who according to leading British art investigators has an impressive record of assisting in the recovery of missing paintings. Known to the underworld as a fence - someone who can find buyers for stolen art - he was invited to a meeting in Dublin.

"They made me strip off to make sure I wasn't wearing recording equipment. Then they took out the painting. It was wrapped on the floor in a blanket - they just laid it out, pulled the blanket off and there it was, Vermeer's The Concert. These guys didn't even know themselves what it was at the time." Colin was fairly certain he was face to face with the real thing. "I'm expert enough to know it was a very old painting, not a modern copy." He reports seeing stickers on the back of the canvas, but says he was more impressed by the quality of the original frame, and the stretchers.

Colin is imprecise about when this occurred but says it was within the last couple of years. He claims he subsequently made contact with the FBI, who asked him to provide more detailed information about the picture's whereabouts, but UK and Irish legal scruples about sanctioning a payment to suspected terrorists got in the way. "The police wouldn't take it any further," he says. "The painting would have to have gone back to America for any sort of deal to be done and that was never going to happen." Colin says the opportunity to buy the painting has now gone.

This account has been indirectly confirmed by Britain's best known private art investigator. Former Scotland Yard officer Charles Hill is convinced that there was a sighting, if not by Colin, then by another underworld source, of the real Vermeer, making this the first authoritative sighting of the world's most prized missing artwork since the robbery. Hill believes the fate of all the Gardner paintings may be connected with that of one of America's most wanted felons, James "Whitey" Bulger.

Bulger, a leading Mob associate of Joe Murray and for several years a paid-up FBI informant, fled US justice in 1995 hours before he was to be arrested on various counts of robbery and murder. Given his Irish Republican connections, it is widely believed that Bulger may have sought refuge in the Irish Republic, and it's possible the art could have travelled with him or helped pay for his protection. It is hoped that some of Bulger's Irish Republican friends - with a view to making peace or perhaps with other political motives - might yet be interested in trading the pictures back to the authorities. However, even after the ethical qualms about doing such deals, there could be further logistical problems to consider.

"If the paintings from Boston are with an Irish group, or groups, it's an extremely delicate situation," says Dick Ellis, the former head of Scotland Yard's Art and Antiques squad. "It's not a single organisation you're dealing with. It's multiple agencies, all with slightly different political agendas and affiliations. Talking to one group may give you an understanding that you could be getting close. But the reality is you are still a million miles away."

Back in Boston, the Gardner's director Anne Hawley is doggedly optimistic about the prospects for a recovery. "The Tate got its Turners back after a decade," she points out. "And a Rubens recently resurfaced in Moscow that had been missing since 1945." Everyone is hoping, of course, that the Gardner's collection is not missing quite that long. But with so many indications that the artworks have been dispersed among a variety of people or groups, the prospect of a quick resolution to art crime's most intriguing mystery may still be distant.

If there is one small glimmer, it might just come in the shape of showbusiness. Both Youngworth and Connor have boasted of interest from publishers and indeed Hollywood. But to secure the lucrative contracts they have their eyes on, they must surely show some return for all the talk, and find a way to get the art back to its rightful owners.

'Traders of the Lost Art', presented by Ed Butler, is on Radio 4, at 11am on 16 August