As art experts responded with astonishment yesterday to news that a valuable collection of medieval German art lost at the end of World War II has been tracked to a small town in Texas, negotiations to return the bulk of the collection to East Germany accelerated.

The New York Times reported yesterday that the collection apparently was taken from the cathedral town of Quedlinburg in 1945 by Joe T. Meador, a U.S. Army officer stationed in Germany at the end of the war who died in Texas in 1980. Representatives of German interests and Meador's family are now discussing how to deal with the stolen objects, the most important of which, a 9th-century illuminated manuscript known as the Samuhel-Evangeliar Gospels, was recovered last April by a private West German foundation.

"The most valuable part of the lode has already been returned, and its value is priceless," Klaus Maurice, general director of the West German Cultural Foundation of the States, said yesterday by telephone from West Berlin. The foundation, funded by the 11 states of West Germany, attempts to return lost major art objects to national museums. It paid a $3 million "finder's fee" to a lawyer representing an American seller who demanded anonymity. The value of the manuscript has been put at more than $50 million.

Maurice said that until yesterday, he was unaware of the identity of the seller or where the Gospels had been for the past 45 years.

Most of the remaining artworks are believed to have been held for years in the First National Bank of Whitewright, Tex., the tiny town where Meador lived. Neither members of his family nor the Dallas lawyer who represents them, John Torigian, could be reached for comment yesterday.

The Quedlinburg collection, which includes a jewel-encrusted reliquary, two manuscripts and a number of liturgical pieces that belonged to early medieval German rulers, were held for centuries in the medieval cathedral in the town, now in East Germany. As World War II reached an end, the artworks were hidden in a mine outside the town but disappeared soon after American troops reached the region. Maurice said the recovered Gospel manuscript is now undergoing restoration in Berlin and that after it has been put on public display, he hopes it will be returned to the cathedral.

"These are among the great treasures of early medieval art in Europe," Sydney J. Freedberg, retired chief curator of the National Gallery of Art, said yesterday of the collection. At the end of World War II, he said, "there was some indulgence of this wandering away of German property. People weren't sufficiently strict in seeing that these properties were held in trust and weren't for looting."

Meador reportedly kept the artworks at his home, showing them to neighbors and friends who did not realize their value. After his death, Meador's brother-in-law Don Cook first sought a professional appraisal of two manuscripts from the collection. Cook and Meador's brother Jack later attempted to sell the manuscripts for $9 million, according to Maurice, "a price nobody would pay for an object that was stolen." Eventually the manuscript of the four Gospels made its way to Switzerland -- where laws governing the sale of stolen property are considerably looser than in the United States -- and were offered to a West German rare-book dealer, Heribert Tenschert, who suggested that the cultural foundation pay the "finder's fee" in exchange for the manuscript.

The appearance of the Gospels, rumored to be on the market for several years, alerted the art world that the entire Quedlinburg collection might still be found. "When the item was returned in April and media interest was generated, it didn't take a genius to figure that this book was part of a collection," said West German historian Willi A. Korte, who said he has been retained by the Quedlinburg cathedral. "If somebody bothered to carry such a large book with him, he might have bothered to carry other things."

Korte, who does research to return lost works of art to Berlin museums, said the shifting political relationship between the two Germanys has enabled negotiators from both countries to work together in a way that would not have been possible before. "Because of the changes in everything in Germany, we were able to approach the church in Quedlinburg," he said. "Since the church obviously can't pay for such expenses, it would be a German federal agency or the {States} foundation that would serve as an umbrella organization" in obtaining the rest of the collection.

Washington lawyer Thomas R. Kline, who also represents the Quedlinburg cathedral, planned to leave with Korte for Texas last night to continue discussions with the Meador family lawyers. Kline represented the Orthodox Church of Cyprus and the Cypriot government in a recent court case in which it was ruled that valuable mosaic tiles in the possession of an Indiana art dealer should be returned to the Cypriot church from which they had been stolen.

Korte said he has "no specific number -- my objective is spending no more than I have to" in order to retrieve the collection. "I don't know what effect this media attention will have. I don't know what kind of energies it will generate in government agencies."

The apparent resolution of a major art world mystery leaves a number of legal questions undecided.

Korte said that when he was working on his research on the Quedlinburg art, "I talked to U.S. government agencies both on the federal and state level. I felt it was appropriate for me to inform them since it was a situation that might have legal ramifications."

Under U.S. law, legitimate ownership cannot be achieved through theft, nor can a person who buys or inherits a stolen object, knowing that it is stolen, become a legitimate owner. Although relevant statutes of limitation may have passed since the original theft, the U.S. National Stolen Property Act makes the transportation of stolen goods across state or international borders a violation of law.

"I'm not in a position to tell you about anything we are doing or that we might do," said Ely Maurer, assistant legal adviser for cultural property at the State Department. "But there might be a violation of the National Stolen Properties Act, and that's a matter where ultimately the Department of Justice is involved. Secondly, it might be that the owning institution in East Germany or their representatives might start a lawsuit to recover the property. Another possibility is that there could be a local prosecution by the state of Texas for dealing in stolen property."

But negotiators for the German side said they hope to avoid any litigation.

The very fact that the artworks have been discovered makes this case an unusual one, according to New York arts lawyer Franklin Feldman. "Less than 10 percent of stolen art is recovered," he said. As in many cases of art theft, participants in the recovery were careful to avoid implicating themselves in the legal tangle. Art dealer Tenschert said he had not realized until yesterday that the sellers of the first manuscript had more valuables. "I don't want to know," he said.