The Tories and Liberal Democrats are giving up a £520,000 bequest from a former nurse after it emerged that she had intended it to go into public coffers.
Joan Edwards, who died last September aged 90, apparently left the money in her will to "whichever government is in office at the date of my death".
But rather than being passed to the Exchequer, it somehow ended up being shared between the coalition parties.
Conservative and Lib Dem spokesmen said that the parties would be handing the cash to the Treasury.
The announcement came amid growing pressure from Labour and the parties' own backbenchers for them to "do the decent thing".
When the bequest was disclosed along with other political donations, press officers briefed that it had been left to "whichever party was in government". After some negotiation, the Tories received £420,000 and their junior partner £100,000.
However, a copy of the will obtained by the Daily Mail cast doubt on whether Miss Edwards' wishes had been followed accurately.
Both parties have insisted they were merely informed by the executors that they were beneficiaries, and had no knowledge of the details.
Attorney General Dominic Grieve - a Tory MP - has also been dragged into the extraordinary row after it emerged his office was approached by the solicitors handling the estate earlier this year.
A spokesman said the Treasury Solicitor had replied on Mr Grieve's behalf suggesting "further steps the executors might wish to take to identify the correct recipient of the bequest", adding: "It did not, nor could have, advised to whom the bequest should go."