Heinrich Steinmeyer, 84, said he wanted to thank the village of Comrie in Perthshire, Scotland, for the kindness he was shown during his time at the Cultybraggan Camp.
Reports claimed the total donation could be more than £400,000, but villagers said today they had not had the figures confirmed.
Mr Steinmeyer, who was a member of the SS 12th Panzer Division Hitler Youth and was captured near Caen, France, in 1944, wants the money to be administered through a trust fund to benefit elderly residents.
George Carson, who lives in Comrie and has known Mr Steinmeyer for seven years, said: “Originally it was his house which would go towards a trust to benefit the elderly people of Comrie.
“He contacted me about the house around 18 months ago.”
Speaking about the latest reports, the 80-year-old added: “This is a new development but I can’t confirm the figures.”
Mr Carson said that he has agreed to scatter Mr Steinmeyer’s ashes in the hills around the camp following his death.
Mr Steinmeyer, who lives in Bremen in Germany, told the Aberdeen Press and Journal: “I always wanted to repay the generosity they showed me. They deserve everything I have to give them and it is far better they have it than anyone else. Cultybraggan was a holiday camp compared to the fighting.”
Speaking about his captors, Mr Steinmeyer added: “They were tough but always fair. I didn’t expect to find this attitude.”
Mr Steinmeyer told the paper he was won over by the kindness of the people.
He said: “Another time I wanted to go to a football game but I could not afford a ticket. It didn’t matter to them and they told me to go onto the ground anyway.”
David Robertson, Vice-Chair of Comrie Community Council, said: “It has been mentioned at a meeting of the community council.
“The community council are really pleased with it. It’s a great thing.”
Built in 1939, Cultybraggan Camp - located at the entrance to Glen Artney in Perth and Kinross - housed up to 4,000 German prisoners during the Second World War, according to the Ministry of Defence website.
Once known as Nazi 2, it was one of only two maximum security camps in Britain which held prisoners classified as the most ardent Nazis and troublemakers who would be most difficult to repatriate in the post-war period.
It was bought for £350,000 by the Comrie Development Trust following a vote in August 2007 by villagers and members of the trust to purchase the site.
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