It is the year 1241. Good King Louis XI is on the throne of France. The son of Bad King John, "average" King Henry III is on the throne of England and struggling, as ever, against his revolting barons. Medievally speaking, we are in a prosperous and peaceful period. There is a brief lull between two crusades. The Black Death is still a century away.

Down in the verdant forests of northern Burgundy, a castle is under construction: one of hundreds of similar castles to be built in France, and England, at this time. To reach it we could saddle our best charger or mule. Alternatively, we could drive down the A6 motorway from Paris, branch off on to the A77 and then head east into the rolling hills and fields of La Puisaye...

The "owner" of the castle, Seigneur Guilbert, a middling feudal lord, is not in the busy car park to greet us. He is absent, possibly paying homage to his seigneur, the Lord of Ratilly; or maybe straggling back from the Sixth Crusade, which was supposed to have ended 12 years ago in 1229. Instead, our guide, wearing a fetching 13th-century peasant skirt and rug, is Sarah Preston, originally from Bath. She may, we suspect, be an advance spy for the English invasion of France which will begin in 97 years' time and last for a Hundred Years or more.

Sarah's "cover" is that she is a bilingual guide and passionate advocate for the extraordinary spectacle that opens before us: the first medieval castle to be built with entirely medieval methods and materials for 500 years; and the first castle of its kind to be built for nearly 800 years.

The Château de Guédelon is not a film set; it is not a restoration; it is not a hey-nonny-no-medieval theme-park. It is an exercise in archaeology in reverse: discovery by building up, not by digging down. By 2023, it will be a full-sized castle with battlements and a moat and six towers.

When The Independent last visited the site in 1999, there were already impressive beginnings to the towers and curtain walls. Eleven years later, the castle "ordered" by the fictitious Seigneur Guilbert in 1228 (actually 1997), has risen magnificently, and movingly, from the red clay and deep forests of north-west Burgundy.

The rear defensive wall and two towers are almost complete. So are the great hall and seigneur's chamber and the bedroom for visiting royalty. The roof of the living quarters, or "north range", is almost finished with timber beams hewn from the nearby forest. The roof beams are half-covered with tiles handmade on the site using clay mined a few yards away.

The 50 or so labourers work in medieval clothes. A committee of academic experts advises on what is medievally correct. Most of the materials, and many of the tools, are quarried, gathered or made on site: the stones, the mortar, the ropes, the nails, the saws, the timber, the wooden lifting-engines. There are no cranes or bulldozers or breezeblocks or pneumatic drills or load-bearing steel joists. The chapel tower contains the first rib-vaulted roof to be made with purely medieval techniques for 600 years.

A medieval village has sprung up with a forge, a rope-maker, a tile-maker, a wood-carver, a mason's yard and a weaver to provide the materials for the castle. Wooden rafts loaded with masonry are lifted to the battlements by rope pulleys driven by a worker in a wooden treadmill or "squirrel cage". This is a Roman design lightly amended, with a wooden brake, to take account of 21st-century health and safety regulations. An updated 13th-century version, driven by two "peasants" at one time, is on order from Bohemia (aka the Czech Republic).

Geese and chickens wander at will. Horses and carts deliver loads of wood and stone. If you squint your eyes to blot out the other visitors, with their cameras and baseball caps and bright umbrellas, you might have stepped back eight centuries. "The time to get the real time-travel experience is in the early morning or evening before the 21st-century visitors arrive or after they go," said Ms Preston, 37. "Smoke is rising from the village. The workers look like medieval peasants. The half-built castle looms from the mist. For a moment, you ARE in the 13th century."

The visitors from 2010, however unsightly they may be, are vital to the project. The initial funding came not from pillaging the local peasantry but from regional councils, the European Union and large companies. For the last 10 years, Guédelon, 100 miles south-east of Paris, has funded itself from its entrance fees.

Last year it had a record 300,000 visitors, who paid almost €2.5m, making it the second most-visited site in Burgundy. The most-visited site was the Hospice de Beaune, a beautiful 15th-century almshouse built 600 years before, or, if you prefer, 200 years "after", Guédelon.

The building of a medieval castle in the 21st century was the dream of a self-confessed "lover of old stones", Michel Guyot, 62, a local entrepreneur, who has restored the nearby Château de Saint-Fargeau.

France already has an embarrassing surfeit of ancient castles and other monuments, sometimes badly neglected. Why go to the bother of constructing a new one? "Anyone who goes to a medieval castle or cathedral cannot help but wonder how on earth our ancestors built such things," Mr Guyot told The Independent in 1999. "For many years, I wanted to find out by ... building a medieval castle in the medieval way."

The great driving force behind Guédelon is Maryline Martin, the director of the project from the beginning. "We wanted to build something that was not just an intellectual exercise, but something that was human and credible," she said. "That was why we fixed 1228 as our start date and invented Seigneur Guilbert, as our notional owner. His history and his tastes – as a middling lord, with youngish children and with French rather than Burgundian roots and allegiances – have shaped the way that the castle has developed."

Academic historians and archaeologists advise Guédelon; they have also learnt a great deal from the project. "What we have done, which no academic study of old stones could do, is to recreate the human side of castle building," said Ms Martin. "How were the teams of workers organised? How were tiles made? We built four different tile kilns before we were satisfied that we had got it right."

The project has also proved to be an exercise in compromise between 13th-century methods and 21st-century habits, laws and regulations. Can the workers have cigarettes? Yes. Watches? No. Spectacles? Yes. Hard-hats? Sometimes. To satisfy health and safety requirements, the site has been obliged to develop a form of 13th-century wooden scaffolding, which never existed in the 13th century.

Several discoveries have been made. By a process of trial and error, the Guédelon masons hit upon the most effective form of mortar, a mixture of quicklime and rough sand. Its chemical properties matched almost exactly pieces of mortar recovered from 13th-century ruins nearby. The lime in the mortar then began to "leach" or flow from the joints, slightly disfiguring the stonework.

Archaeologists were delighted. "We think of medieval buildings as being exposed stonework. They weren't. Not at the time," said Ms Martin. "They were plastered over and painted white or, in some cases, in bright colours. Now the archaeologists believe they know why our ancestors did this: to cover up the streaking from the lime in the mortar."

A huge conundrum will arise when Guédelon is finished in roughly 2023 (aka 1254). Should the castle be left in its beautiful raw stones as popular imagination will, wrongly, demand? Or should it be plastered over and painted white, like a giant bungalow?

No final decision has yet been made but Maryline Martin has her own strong opinion. "Our role is to educate the public about history, not to perpetuate misconceptions. We should therefore plaster over the castle and, if it were left to me, it would be painted not white, but in very bright colours. Just think how marvellous that would be."