A search has begun in the mountains of central Greece for the treasure of a notorious 19th century Ottoman pasha believed to be enough to plug the country’s vast debts, state TV said yesterday.

Greek-Australian treasure hunter Vangelis Dimas is financing the excavation to locate the hoard of Ali Pasha near the village of Vassiliki, 352 kilometres northwest of Athens.

“The sensors show me that there is great treasure hidden below,” Mr Dimas told state TV NET as a crew manned a heavy drill on a small hill a few metres from the local road. According to Mr Dimas, the treasure could be worth millions of euros.

Vassiliki mayor Vaios Ziakas said the state-approved operation is proceeding slowly and would likely extend into next week.

“So far we have drilled to a depth of 23 metres but the rock is very tough,” he said. “If at 30 metres we have a breakthrough it will mean that there is an underground chamber below.”

Cameras will be inserted to help locate the chamber believed to hold the treasure.

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. He was killed in 1822 in an unsuccessful revolt against the Ottoman Sultan but his treasure was never found. Prior attempts to locate it near his stronghold in the northwestern city of Ioannina have been fruitless.

The village of Vassiliki is named after the pasha’s Greek-born wife who hailed from the area. The Greek state is entitled to 50 per cent of the finds and the municipality will also be given a percentage, officials say.

Greece is currently battling a debt crisis and growing recession after coming close to bankruptcy earlier this year. The Greek debt stands at more than €300 billion.