The future of a notorious mansion owned by the Gaddafi family in Hampstead Garden Suburb will soon be secured after a landmark court ruling that the property must be returned to the Libyan state.

The house in Winnington Close was occupied by squatters shortly after the Arab Spring uprisings and was the scene of human rights protests about the political situation in Libya under the late tyrant Colonel Gaddafi.

In a landmark ruling on Friday, March 8 the High Court ruled that the property, valued in excess of �10million, must be returned to the State of Libya.

It is the first case of assets being returned to a post-revolutionary country in the wake of the Arab Spring.

The luxurious house is currently held by Capitana Seas Limited, a company registered in the British Virgin Islands.

But in the ruling Mr Justice Popplewell said he was satisfied that the former Libyan dictator’s son, Saadi Gaddafi, was the sole beneficiary of the company and the owner of the house.

Adding that the property had been “wrongfully and unlawfully purchased” he made a court order giving the company 14 days to return it to Libya.

But Dr Saul Zadka, a political forecaster who led the storming of the mansion by protesters last year, said he did not trust the new Libyan government to use the proceeds from any sale of the house wisely.

“I would have liked to see the money used to compensate the British victims of the regime,” he said.

“There are families whose loved ones died at the hands of Gaddafi and their suffering needs to be recognised.”

Lawyer for the State of Libya, Mohamed Shaban, said the High Court ruling was a landmark victory.

“This is the first case of its kind following the Arab Spring where assets must be returned,” he said. “It should be a catalyst for future claims around the world.”

He added that his firm, MS Legal, was actively pursuing other Libyan assets in the UK and abroad and despite the “controversial” history of the Gaddafi mansion he expected it would be sold.

Some have suggested that a blue plaque should be erected at the mansion to mark its chequered history.

But an English Heritage spokesman said the house would not be eligible, as under the blue plaque scheme a person has to be dead for 20 years, have a lasting legacy, and have contributed to human happiness, to qualify for the memorial.

It is also as yet unknown whether the Gaddafi connection will have any impact on the property’s value.

Trevor Abrahmsohn, owner of Glentree estate agents, sells 90 per cent of homes in Hampstead Garden Suburb and sold the Gaddafi house in its previous two incarnations.

“It will be rich in notoriety that’s for sure,” he said.

But he added that the Suburb has a somewhat torrid history including two homes where murders had occurred and one where bullet holes were visible at the time of sale.

These houses sold because the area remained “extremely desirable”, he said.

It is likely to be the condition of the Gaddafi mansion, which was squatted in for some months, and whether it has survived being occupied by “weird and wonderful people” that would determine its value, Mr Abrahmsohn said.