“It’s a very important piece of cinema history, which was not known until Saturday night,” says David Robinson, director of the Giornate del Cinema Muto, the annual silent film festival in Pordenone, north Italy. He’s talking about a film that is just 12 and a half minutes long, but one that sheds light on the man he calls the “first artist of the cinema”: Georges Méliès, director of hundreds of magical films, many of which have been lost.

Méliès’s best known film is, of course, Le Voyage Dans La Lune, but Les Aventures de Robinson Crusoé, the newly discovered film, is an even more ambitious work; a landmark in the history of narrative cinema.

It is also a piece that illuminates much about Méliès’s tragic personal life. Making a hit movie brings problems as well as profits, as Méliès learned in 1902. His big-budget (10,000-franc) spectacular Voyage was released in September that year, and it was an outrageous success. It still is: in the years since its release its fame has only multiplied. The recent restoration of an original, coloured copy of the film and its lionisation in Martin Scorsese’s Hugo are only the most recent nods to the master of Montreuil’s lunar voyage.

One hundred and 10 years ago, though, Méliès was a worried man. In the first place, he was dismayed by the pirate copies of Voyage that were being shown in the States. American film-maker Thomas Edison had his technicians make copies on the sly, which he then distributed without paying any fee to Star Film, Méliès’s studio. It was a worrying development, and one that contributed ultimately to Méliès’s bankruptcy in the following decade. Added to his financial worries, Méliès had the pressure of creating a followup that could contend with Voyage’s indelible image of a rocket spearing the eye of the man in the moon.

In today’s cinematic landscape of sequels, prequels and trilogies filmed back-to-back, Méliès’ decision seems a bold one: his next film wasn’t science fiction, nor was it really like anything else he ever made. Les Aventures de Robinson Crusoé is an adaptation of Daniel Defoe’s classic novel, and while it features trick photography, pyrotechnics and elaborate set design, they are here put to work in telling the story, rather than for their own colourful sake: this, Méliès said, was a “cinematographic play” rather than a series of “fantastic tableaux”. “It’s really an exceptional piece of narrative for that period,” says Robinson.

For more than a century, all we have been able to see of Crusoé is a short black-and-white scrap, but last year a near-complete hand-coloured version was found in a donation of nitrate reels made to the Cinémathèque Française. The 4k restoration of Crusoé (12 and a half minutes of the 15-minute original) debuted on 35mm at the Giornate del Cinema Muto in Pordenone with a new score by Maud Nelissen – and it has much to tell us about Méliès and his methods.

The story plays out across 25 scenes, culminating in an “apotheosis” sequence; the inspiration for the film’s design comes from Grandville’s classic 1840s illustrations for the novel, although Méliès enlivens these with colour. As Robinson explains: “Never have we seen a Méliès film with the colouring so intact, and not just ordinary colouring but colouring which is used in a really dramatic way: for the gunshots, the lightning and things like that.”

Painted on by hand, meticulous brushstrokes add skin tones, foliage and even the vivid plumage of a tiny parrot. The garishly coloured costumes of the cannibals who attack Crusoe and Friday, the flames with which the traveller attempts to attract help, a sunset and the aurora that surrounds our heroes in the final frame all invigorate the story – and these rich or delicate colours are also beautifully translucent when projected on film. The anonymous colourists used the same aniline colours that were used to decorate slides for magic lanterns, one of the cinema’s closest ancestors.

The combination of elaborately designed and constructed sets, populated by actors and animals and overlaid with coloured ink, brings to mind a picture book come to life – it’s very similar to the impact of modern films that combine live action with animation or CGI. But opposed to the supposed perfection of digital enhancements, there is an extra frisson in being able to see the stray splashes of paint. Watching Crusoé, you can marvel at the effects, and the work that went into them.

And make no mistake, Méliès has no intention of hiding his light under a bushel, or of being ripped off again. The copyright difficulties he encountered on his previous film are sidestepped by a cinema history first: the practical, if inelegant, innovation of placing the studio trademark in the film itself. There are no dialogue captions or intertitles here, so the Star Film logo is displayed prominently in the scenery, nestled among the trees on Crusoe’s island, or perched on the wreck of his ship.

Méliès plays the lead too, though his features are all but hidden by a wild, shaggy wig and beard. An unknown actor plays Friday in blackface, tumbling and bumbling through a performance that strikes an inevitably unpleasant note.

One of the most fascinating aspects of this restoration, however, is that the narration that would have accompanied the film at its screenings has survived also. The commentary for Voyage also exists, but is rarely performed. The “boniment” was probably written by Méliès, and while it narrates the onscreen action (“the ship returns Robinson and Friday to the port of Southampton amid cheers from the crowd”), it also immodestly digresses to highlight the film’s achievements, and the genius who created them.

At the Giornate, the commentary was delivered, in an English translation, by Paul McGann, and as Robinson says, it is not just entertaining, but a historic document from the era of the cinema of attractions, and one of the many aspects that makes Crusoé such a precious find: “Here is someone actually saying: ‘I am making a play.’ No one was making a play [on film] in 1902.”

Méliès is also keen to draw attention to his technical innovations: “A thunderstorm breaks forth and dazzling lightning illuminates the rocks and landscape. This new effect in cinematography is obtained by an entirely new method never before utilised, and is of the most strikingly realistic character, the flashes of lightning being an exact counterpart of those in nature, and lends a wonderful sense of realism to the picture.”

It may be an overstatement, and it raised a ripple of chuckles at the Pordenone screening, but it’s not just vanity – that’s the sound of a man trying to maintain his reputation, and to defend his livelihood.

• The 31st Giornate del Cinema Muto continues until Saturday 13 October. For full details visit cinetecadelfriuli.org/gcm