A gold hunt in central Greece for the treasure of an Ottoman pasha that is supposed to help save the debt-hit country from default was called off after diggers hit water, a local official said.

“We found nothing,” said Vaios Ziakas, the mayor of Vassiliki village where the operation financed by a Greek-Australian treasure hunter began last week. The prospector has packed the equipment and returned to Athens,” said Mr Ziakas.

The operation to locate the hoard of 19th century overlord Ali Pasha began last week near the village, some 352 kilometres northwest of Athens. A heavy drill had excavated to a depth of nearly 40 metres before an underground rock cavity believed to hold the treasure was flooded with water. According to the mayor, prospector Vangelis Dimas has pledged to return next week, drain the water and continue the operation.

“We are not bothered by this, it’s good publicity for the village,” the mayor said.

Greek media have reported that the prospector – who had said the treasure could be worth millions of euros – had in the past mounted another gold dig in the Peloponnese peninsula without success.

Ali Pasha was an Albanian-born potentate who ruled the area for the Ottoman Empire in the early 19th century, shortly before the Greek revolution that ended the country’s four-century Turkish occupation.