A long quest for booty from the Spanish colonial era appears to be culminating in Chile with the announcement by a group of adventurers that they have found an estimated 600 barrels of gold coins and Incan jewels on the remote Pacific island.

"The biggest treasure in history has been located," said Fernando Uribe-Etxeverria, a lawyer for Wagner, the Chilean company leading the search. Mr Uribe-Etxeverria estimated the value of the buried treasure at US$10bn (£5.6bn).

The announcement set off ownership claims. The treasure hunters claimed half the loot was theirs and said they would donate it to non-profit-making organisations. The government said that they had no share to donate.

It also prompted speculation about the contents of what is considered to be one of the great lost treasures from the Spanish looting of South America. Chilean newspapers were filled with reports that the stash includes 10 papal rings and original gold statues from the Incan empire.