Mark Townsend and Caroline Davies
The bronze sculpture was stolen from the 72-acre estate of the Henry Moore Foundation in Much Hadham, Hertfordshire, in December 2005. The theft baffled art and crime experts and sparked a global hunt for the culprits.
Police feared at first that it had been stolen to order, but investigations suggest it was taken by a group of travellers from Essex and that the metal may have ended up feeding China's growing demand for electrical components.
Detective chief inspector Jon Humphries, of Hertfordshire police, said it is believed the figure was "irreparably damaged" shortly after being taken away on a flat-bed lorry.
Inquiries indicate that the statue was moved through a Dagenham scrap dealer in December 2005 and on to another Essex scrapyard. Shortly afterwards it was shipped abroad, possibly to Rotterdam and then further east, circumventing an order to Interpol to monitor all ports for the distinctive figure.
Humphries said estimates suggested that the sculpture, three metres long and two metres high, may have made just £1,500 as scrap metal, a value that equates to just a few hundred pounds in current market prices. The Henry Moore Foundation is believed to have offered £10,000 for its safe return.
Humphries, who led the investigation, said: "We have evidence and information suggesting it was cut up on the night, then taken to a location where it was irreparably damaged before it was shipped abroad. In my mind we've managed to kill off the mystery as much as is possible."
Charles Hill, a former head of Scotland Yard's art and antiques squad and now a private art detective, added that he had been told by the notorious art thief Jimmy Johnson, whose family carried out a string of robberies at stately homes in 2005 and 2006, that a well-known group of travellers was behind the theft. Johnson alleged that the metal had been shipped to Rotterdam, then possibly to China.
Richard Calvocoressi, director of the Henry Moore Foundation, said the theft remained a "source of great regret" and that "considerable efforts" had been made to find the sculpture. Moore, who died in 1986, was renowned for his monumental, rounded reclining figures.
"Security measures have been considerably increased since the work was taken," added Calvocoressi.
The latest developments come amid a huge rise in thefts of public sculptures, up by more than 500 % in the past three years, according to Ian Leith, deputy chairman of the Public Monuments and Sculpture Association (PMSA). Police and art experts believe that although some are taken for scrap, others are targeted by black market collectors. Leith believes there is clearly an illegal art collector market, with thefts occurring on average once a month. "It is not purely due to the bronze," he said.
He added that because of the lack of an audit, local authorities and arts bodies were incapable of providing accurate information on stolen pieces. "How do we know what public art exists if we do not record what is there? There is literally a national gallery of art out there," said Leith.
The PMSA is attempting to create an online database of pieces in public places, but is hampered by a lack of funds.