The UN is insisting that a New York single mother whose account was wrongly credited with more than $500,000 of the organisation's cash must return it all.

Susan Madicall, who lives with her young son in one of New York's tough public housing projects in Brooklyn, started receiving payments into her Chase Manhattan bank account in February 1998.

The first amount of more than $3,000 arrived some months after she said she had been persuaded by a telephone salesman to stake $100 of her money on a foreign lottery. She believed she had won the lottery.

"I said mum I've finally won. I won the foreign lotto. I saw my name, I saw my address, I saw my account number. I saw the foreign country. I said mum we won, we won. I got so excited," she said.

The payments continued to arrive and over two years her bank account was credited with more than $700,000 from countries like France, Italy, Uruguay, Namibia, and Fiji.

From rags to riches

Ms Madicall, who had been in debt before the money started flowing in, resigned from her job.

She bought a launderette near her home in Brooklyn and called it the 'Smile Laundromat' as a celebration of her good fortune.

But last September her bank wiped that smile off her face when it told her that the payments into her account were the result of an horrendous blunder.

The money had in fact been intended for the United Nations' environment programme.

The UN's New York bank account number differs from Susan Madicall's by just one digit.

And for two years, neither the bank nor the UN appears to have noticed.

Now the UN wants its money back.

"The countries who gave us the money had a very specific purpose in mind and it wasn't to buy a laundromat in Brooklyn," said UN spokesman Fred Eckhard.

Court battle

The case is now before the courts in New York, which earlier this month supported the bank's decision to freeze Susan Madicall's account.

When asked if a common sense solution might be for the UN to recover some of the money and let Ms Madicall keep what she has spent already, Mr Eckhard appeared unconvinced.

"Well, that will be very nice. I mean, she's a person of modest means. She had the classic rags to riches story played out in her life. But we have taxpayers' money from lots of countries including small, not very rich countries, like Fiji, who contributed this money for the sake of environmental protection," he said.

He added, "We don't have the right to give any of this away."