Gold fever has gripped a small mountainous village in central Greece where a treasure hunter is to begin a state-approved excavation to find the hoard of a notorious 19th-century Ottoman pasha.

The Greek-Australian treasure hunter, who has declined to identify himself for interviews, claims that the treasure could be enough to alleviate Greece’s massive debt woes, Vassiliki village mayor Vaios Ziakas said.

“It’s an incredible story, let’s hope it is true,” said Mr Ziakas.

“The Greek state is entitled to 50 per cent of the finds and the municipality will also be given a percentage,” he said. The operation to find the hoard of Ali Pasha is set to begin next week at an undisclosed location near the village, some 352 kilometres (219 miles) northwest of Athens.

Two drills brought from the capital will excavate to a depth of up to 20 metres and cameras will be inserted to help locate the underground chamber believed to hold the treasure, remarked Mr Ziakas.

Local and central government authorities have approved the dig and municipal officials will be present, he said.