The Conservatives and Liberal Democrats are to return a £500,000-plus bequest to "the government" after initially taking the cash to fund their general election campaigns.
Intense public anger at the apparent misuse of the money followed the revelation that the £420,576 received by the Tories and the £99,423 pocketed by the Lib Dems had actually been intended for taxpayers.
It emerged earlier that former nurse Joan Edwards, who died aged 90 in September 2012, left her estate to the government of the day rather than to the political parties controlling it.
A Lib Dem spokesperson told Politics.co.uk the U-turn decision had been taken because "we thought it was most in line with what she wished, having spoken to the executors".
The Conservatives followed swiftly afterwards with a similar confirmation.
Edwards' decision to hand her estate to the government is not an uncommon one, with the Treasury receiving over £1 million in cheques from executors each year.
But on this occasion the Conservatives and Liberal Democrats had chosen to interpret her will as offering a donation to their political parties. The money was split based on their respective balance of MPs in the Commons.
The Mail quoted her will as saying: "I bequeath all my estate both real and personal to... whichever government is in office at the date of my death for the government in their absolute discretion to use as they may think fit."
Lucy Sanders, a neighbour, told the newspaper: "She never talked about politics. She wouldn't dream of saying who she voted for. She was old-fashioned that way."
Spokespersons for both the Tories and the Lib Dems had insisted it was solicitors representing the spinster's executors which had told them they were the beneficiaries.
But party claims that the attorney-general's office ruled the bequest was a party political donation was contradicted by a statement from the office itself, which said it had advised the executors on how to determine where the money should go but had not offered specific advice.
The coalition parties have now moved to return the money to the Treasury's coffers, leaving each taxpayer 2p better off.
Edwards' donation was the largest individual sum of money to come in the second quarter, which saw the Tories net £4.1 million, Labour receive £3.1 million and the Lib Dems £800,000.
The Electoral Commission figures show that the 11 political parties registered in England and Wales together received £8,529,619 in donations over the quarter.