Nestled in the rolling Somerset countryside and surrounded by 17 acres of meticulously kept gardens, Halswell House is the sort of quintessentially English retreat that would make an ideal backdrop for a romantic period drama. It is also a perfect venue if you happen to be a member of a shady European party circle which indulges in the very un-English pastime of mass orgies.

Last weekend, employees at the 17th-century manor house, which is accustomed to hosting corporate dos and chocolate-box weddings for well-heeled clients, were left speechless when 350 masked guests stripped off at the stroke of midnight and engaged in group sex of bacchanalian proportions.

According to those who witnessed the spectacle, security guards gave up trying to persuade copulating couples to go to their rooms because almost every guest at the party was "otherwise engaged" with a fellow reveller.

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Grahame Bond, the hotel's multimillionaire owner, had hired his 30-room house out for £9,000 to a Dutch company who planned to host a private party, charging guests £65 a ticket. When a convoy of BMWs, Aston Martins and Porsches swept up the driveway on Saturday evening and disgorged their masked occupants, staff assumed they were dealing with a fabulously well-attired fancy-dress party.

But at the stroke of midnight, the atmosphere suddenly changed. "We began the evening by serving the guests Kir Royals and the champagne flowed," Mr Bond recalled yesterday. "There was a man – the party organiser – telling guests in a loud voice that they were all under a spell. Then, at the stroke of midnight, he told them that if they kissed a guest the spell would be broken. I couldn't believe my eyes. It suddenly turned into a scene from Eyes Wide Shut."

Wherever Mr Bond and his dumbfounded staff looked, they could see revellers indulging in group sex. "Everywhere there were couples having sex," he said. "Over the banisters alone I counted four couples at it."

Exclusive swinging parties have long been a staple for the debauched doyens of Mayfair, but locals from the nearby village of Goathurst were flabbergasted. "My staff were astonished and it wasn't long before word got out," admitted Mr Bond, a property developer who acquired Halswell House in 2004 and has since spent more than £5m renovating the building.

The Independent has discovered that the party was hosted by Little Sins, a Dutch company which specialises in throwing luxury swingers parties for Europe's wealthy élite. Known as an "Eyes Wide Sin" party, anyone attending must be over the age of 21 and men can only join if they are part of a couple. The dress code is strictly monitored by a "doorbabe", who makes sure that anyone attending the party has obeyed the sartorial requirements. Once inside, pretty much anything goes.

A promotional video invites party-goers to a "temple of lust" in the British countryside and claims it is the first time that Little Sins has come to Britain. The footage, taken from a previous party in a German castle, shows naked and masked couples cavorting to the sounds of thumping club music. The mobile-phone number of the party organiser was not answered yesterday, but Mr Bond said the owner of Little Sins had told him that the British event had been particularly debauched.

Mr Bond said: "The chap who organised it told me that in Holland they are all rather used to these things, but because this doesn't happen much in Britain he said the guests really went for it. He certainly wasn't wrong."

The hotel's owner insisted, however, that he had no inkling that an orgy had been planned. "We were terribly naïve," he said. "The organisers were very polite and well-spoken. Perhaps the alarm bells should have rung when they asked for a chill-out room filled with beds and silk sheets, but we thought they were going for a Moroccan feel and might want mint tea or something."

The revellers did, however, call it a night at 3am. "We didn't have any trouble and everyone went to bed very quickly. Most of them stayed in the hotel rooms but there were a few who got on a bus and stayed at the nearby Travelodge," said Mr Bond.