Tracking down the ill-gotten gains of fallen dictators is rarely an easy task but there are hopes that a luxurious property in London, thought to be worth around $16 million, may provide a breakthrough in the case of the Gaddafi family.

Libya's new government is seeking legal ownership of the house (shown here, inside and out, in a set of photographs on the Telegraph's website), but first it will have to satisfy the British courts.

The house, currently squatted by a group known as Topple the Tyrants, was bought in 2009 and registered in the name of Capitana Seas Limited, a company based in the financially-secretive British Virgin Islands. Normally, that would be enough to conceal the identity of its real owner but, as a result of UN sanctions imposed on Libya, the British authorities have been able to discover that its beneficial owner is Saadi Gaddafi – the colonel's footballing son. Saadi is at present under house arrest in Niger after fleeing Libya.

Having established who the owner is, the next step is to prove that it was bought with misappropriated funds. That should not be too difficult, according to Mohamed Shaban, a lawyer working on the case for the Libyan embassy in London: there is simply no way that Saadi could have paid for it with his own money.

His official salary as a commander at the Libyan defence ministry was not enough to cover the purchase, nor was the income from his brief career as a professional footballer in Italy, Shaban told the BBC. Also, Shaban says, any large gift to Saadi (from his father, for example) should have been registered as required by Libyan law – but none was.

The embassy's lawyer views this as something of a test case which will help to establish the level of evidence required by the courts. If it succeeds, other claims relating to suspected Gaddafi assets in Britain are likely to follow.

Posted by Brian Whitaker, 17 December 2011