Archaeologists have uncovered remains of the first Iron Age 'loch village' to be found in Scotland, Historical Scotland has announced.

The discovery was made in an excavation part-financed by Historic Scotland's archaeology funding programme.

Those working on the project have discovered the remains of an Iron Age 'loch village' in Wigtownshire, and experts believe the significant find could be 'Scotland's Glastonbury' – a reference to the Glastonbury Lake Village in Somerset – which is a site of international significance.

The excavation was part-financed with £15,000 from Historic Scotland, and commenced during the summer by AOC Archaeology Group, who hope to use this year's pilot excavation as the starting point for a broader programme of archaeological activity with multiple funders.

It is one of 55 archaeology projects to receive funding from Historic Scotland for 2013/14, and monies awarded range from £250 to £141,031 with a total of £1,398,976 granted.

The Wigtownshire dig was a small-scale pilot excavation of what was initially thought to be a crannog in the now-infilled Black Loch of Myrton. It was under threat of destruction as a result of drainage operations. However during the excavation, AOC Archaeology Group – who worked on the dig in conjunction with local volunteers – discovered evidence of multiple structures making up a small village.

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What was first thought to be one of a small group of mounds before excavation was revealed to be a massive stone hearth complex at the centre of a roundhouse. The timber structure of the house has been preserved, with beams radiating out from the hearth forming the foundation, while the outer wall consists of a double-circuit of stakes. The most surprising discovery was that the house was not built on top of an artificial foundation, but directly over the fen peat which had gradually filled in the loch. Rather than being a single crannog, as first thought, it appears to be a settlement of at least seven houses built in the wetlands around the small loch.

This type of site is currently unique in Scotland and there are few other comparable sites elsewhere in the British Isles. Similar lake villages – including Glastonbury and Meare, which is also in Somerset – have been found in England, but this is the first 'loch village' thought to be uncovered in Scotland. Experts hope that its discovery will help to improve knowledge and understanding of Iron Age Scotland.

Commenting on the discovery, Fiona Hyslop, Cabinet Secretary for Culture and External Affairs said: "The remains of an extensive Iron Age settlement at the Black Loch of Myrton are an exciting and unexpected find. There are some excellent examples of 'lake villages' in England but this is the first time archaeologists have found a 'loch village' in Scotland. I am pleased too that experts joined forces with local volunteers on this project and I look forward to discovering what more this important find can teach us about Iron Age Scotland."

(JP/MH)