Archaeologists have begun digging for treasure beneath a 19th-century fort in northern India, after a Hindu holy man said a king had appeared to him in a dream and told him about the cache.

The treasure hunt began after Shobhan Sarkar, a Hindu swami, relayed his dream to a government minister who visited Sarkar's ashram last month.

The swami said the spirit of King Rao Ram Baksh Singh, who was hanged in 1858 after rising up against British colonial forces, had told him to take care of the 1,000-ton treasure worth almost £30bn hidden under the fort in the northern state of Uttar Pradesh.

Indian geological and archaeological officials who surveyed the area on Sunday found evidence of metal about 20 metres underground, district magistrate Vijay Karan Anand said.

The Archaeological Survey of India said it would begin digging under a temple contained within the ruins of the old fort.

A host of interested parties have already lined up to stake a claim to the treasure, believed to be in gold, silver and precious gems. One of the king's descendants, Navchandi Veer Pratap Singh, said: "If gold is really found there, we should get our share."

Uttar Pradesh state authorities, as well as local officials, also said they had a right to the wealth.

"The treasure trove should be used for the development of the state," the local MP Kuldeep Senger said. Uttar Pradesh, with a population of 200 million, is one of the poorest and least developed states in India.

Residents of the impoverished Daundia Khera village, who have no access to electricity, said they had long known about the treasure from stories told by their elders. "Everyone in the village knows about it," said 60-year-old Vidyawati Sharma, who learned the stories from her father-in-law.

Locals have found silver and gold coins in Unnao district, according to the swami's disciple Om Ji. No one knew exactly where the treasure was until the late king visited the swami in his sleep, he said.

Authorities set up barricades as thousands of people descended on the village. People were offering prayers at the temple within the fort's ruins.

Locals said they hoped Sarkar's vision turned out to be real, as he was "revered as God in this area because he has done a lot for this place," said Chandrika Rani, a schoolteacher.

Indian officials are also unearthing another treasure trove found two years ago in a 16th-century Hindu temple, and have barred the media and public from the excavation site in the southern state of Kerala.

The discovery made the Sree Padmanabhaswamy temple the richest known religious institution in India, with bagfuls of coins, bejewelled crowns and golden statues of gods and goddesses. The supreme court has ordered a full inventory of the treasure.

The former royal family that has remained the temple's trustees since India's 1947 independence has said the treasure belonged to the Hindu deity Vishnu, who is also known in the region as Padmanabhaswamy.