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The ship, which ran aground and sank on the Pondoland coast with nearly 150 passengers on August 4, 1782, en route to England from Ceylon, was reputed to be carrying a fortune in diamonds and gems, as well as the fabled gold and ruby-studded Golden Peacock throne of Shah Jehan, the Moghul emperor who built the Taj Mahal.

Though countless expeditions have been launched to recover the vessel and its treasure, the exact location of the vessel has always been disputed by rival treasure hunters and historians.

However it was learned yesterday that a team of Hungarian divers and Cape Town archaelogists have quietly been excavating the shipwreck site for the past few months, away from the glare of media publicity, at Port Grosvenor, north of Port St Johns.

Team leader and former University of Cape Town archaeologist, Jonathan Shaftman, was reluctant to reveal full details of the discovery when contacted yesterday at the team's remote archaeological base camp.

But he did say: "We have found objects which give us almost 100 percent proof ... and we have also convinced the National Monuments Council that what we have found is indeed the Grosvenor."

One of the artefacts in question is believed to be a brass plaque bearing the name of Colonel Edward James, who appears on the original passenger list.

Full details of the discovery are likely to be revealed next month.

Though the sea has destroyed most of the vessel, which was built out of English oak, the team is believed to have discovered at least 12 cannons and a host of smaller artefacts -- many of which were "hoovered" up with a modified diamond dredger and then sieved on the beach.

The team is believed to have taken sonar images of the site and there are plans to take this information and artefacts from the shipwreck on a world tour.

Further confirmation of the discovery has come from well-known Durban businessman and former Natal Parks Board chairman Pat Goss, who dived at the site 10 days ago with Mr Nick Mavrodinov, a Bulgarian-born PhD student.

"I have been one of the greatest sceptics about this wreck for nearly 50 years, but what I saw has left me quite breathless," said Goss, whose family has been closely associated with the Pondoland coast for five generations.

"I never believed anything would be found after 218 years of thumping seas but after seeing all these things I was like a little boy."

The Hungarian-sponsored team -- which has an excavation permit from the National Monuments Council -- showed him several gold and silver coins and other artefacts to convince him of the veracity of their claims.

They showed him Spanish gold coins minted in Lima, Peru, silver coins, Indian coins, a musket trigger guard, buttons and a brass hairbrush, all of which have been sent to the East London Museum.

Goss said the cannons he saw bore a remarkable resemblance to the cannon he saw as a boy outside Lusikisiki's Royal Hotel, reputedly salvaged from the Grosvenor.

There was no sign, however, of the priceless Peacock Throne of Shah Jehan, looted later by the Shah of Persia.

However, Goss said the archaeologists did not believe the throne was ever aboard the Grosvenor. They also rejected theories that the vessel was carrying the annual profits of the British East India Company in the form of rubies and diamonds.

However, it was possible that there were a number of rich merchants aboard, borne out by the discovery of diamonds at Kei River mouth in 1925 by Johan Sebastian Bock, a 73-year-old man who was jailed for three years on suspicion of "salting" illegal diamonds around the river mouth.

At the time, his lawyers argued that the diamonds had been dropped by one of the wealthy survivors of the shipwreck as he headed for the Cape.

Though 138 people survived the wreck, only six people were reported to have completed the long journey to Cape Town on foot, clashing on their way with local residents.