A major excavation led by the British Museum has unearthed a wealth of revealing detail about a Greek trading city in ancient Egypt. Wood from Greek ships and Egyptian figurines dedicated to a “festival of drunkenness” are among more than 10,000 ancient artefacts discovered on the site of the city of Naukratis, which was on the Nile delta. The ancient port is mentioned in the accounts of Herodotus, the Greek historian writing in the fifth century BC.

The finds reveal a vast trading network befitting an international city with a history spanning 1,000 years from the seventh century BC. Dr Ross Thomas, the British Museum curator who leads the project, told the Observer that Naukratis should now be viewed as “the Hong Kong of its era”.

“This is clear from the wide variety of objects found,” he said. It had been thought by many scholars that Naukratis was a relatively small town.

Although Naukratis had been known about from ancient sources, its precise location had been lost until its rediscovery by an English Egyptologist in 1884. Having since been repeatedly excavated, the site was thought to have been exhausted, but the latest excavation has established that it was twice as large as had been assumed, and that only a small percentage of it has been explored.

“Previously, they thought it was only about 30 hectares and all destroyed”, said Thomas, “but now we know it’s over 60 hectares, so there’s a lot of archaeology there still to dig.”

Naukratis was a gateway for trade and cultural exchange between Egypt and other peoples of the Mediterranean. Its name in Greek means “mistress of ships”, and some of the most exciting new finds are wooden fragments from Greek vessels. “It’s exceptionally rare,” Thomas said. “To find them this far into Egypt is exciting.”

While some have interpreted Herodotus’s account as suggesting that freight had to be carried to Naukratis in barges, finds such as mortice, tenon and dowel joints used in Greek construction show that the Canopic branch of the Nile as far as Naukratis was navigable by ship.

“Previously, people thought the ships just stopped at the Mediterranean [coast] and offloaded on to barges. We can now confirm for the first time that seagoing vessels travelled this far into Egypt,” said Thomas.

The excavation has opened up the location of the city’s harbour, as well as two sites of Greek temples and sanctuaries, including the Hellenion, a complex mentioned by Herodotus as a place where Greeks came to worship.

Geophysical and other surveys paint a vivid picture of the city. “It is clear from this new evidence that much of [Naukratis] was populated with tall tower houses that commonly had three to six storeys. These are similar in construction to those found to this day in Yemen. We should imagine a mud-brick Manhattan, populated with tall houses and large sanctuaries, befitting a large cosmopolitan city.”

Thomas added that the excavations show Naukratis as having been more densely inhabited than had been thought, supporting a population conservatively estimated at around 16,000.

He said the finds also cast new light on the lives of women in the city: “There are more Greek inscriptions of the sixth century from Naukratis than in any Greek sanctuary. They tell us a lot about the traders: there are some women represented; usually it’s just male traders. There are characters that also appear in other Greek cities, so we can start to track where people are coming from.”

Naukratis was a place where cultures mixed and goods from the ancient world were traded. Egyptian grain, papyrus and perfumes were exchanged for Greek, Cypriot and Phoenician silver, wine and oil. Cooking pots in both Egyptian and Greek styles have been found alongside bread platters, dishes and a wide variety of amphoras and figurines from the fifth and fourth centuries BC, ritually deposited during Egyptian festivals related to the inundation of the Nile, such as the “festival of drunkenness”. Terracotta figurines include depictions of Hathor, goddess of the sky, women and love, and of a worshipper carrying a phallus and a wine jar.

Naukratis will feature next year in the British Museum’s Sunken Cities exhibition, covering the lost cities of Thonis-Heracleion and Canopus. There will also be a touring show.