Parishioners of a tiny church in rural Herefordshire have long believed a rumour that their altar cloth once belonged to Queen Elizabeth I.

It was kept at St Faith's Bacton in an old wooden frame.

Now, having spotted it by chance, experts at Historic Royal Palaces (HRP) have concluded the exquisitely-embroidered cloth of silver is so lavish, it is likely to have come from a dress worn by the Tudor monarch herself.

Discovery: Once used as an altar cloth at St Faith's Bacton church in Herefordshire, experts have now found the lavish material, which is exquisitely embroidered, originates from a dress worn by Queen Elizabeth I

The discovery is all the more exciting because, apart from accessories like her gloves, none of the queen's famously-magnificent dresses are known to have survived.

Such is its national importance that, for security and conservation reasons, it can no longer remain at the church, despite an historic link dating back hundreds of years.

Evidence for its royal provenance is strong. In the queen's famous Rainbow Portrait in Hatfield House, her Hertfordshire residence, she is dressed in a strikingly similar fabric and one of St Faith's early parishioners was her faithful lady-in-waiting, Blanche Parry, who received clothes from her royal mistress.

Tracy Borman, HRP's joint chief curator and a leading Tudor historian, described the cloth as 'a remarkable survival, a beautiful thing'. She added: 'This is an incredible find.'

This was 'a high status fabric which Tudor sumptuary law dictated could only be worn by royalty or the highest echelons of the aristocracy', she said.

The queen dazzled her contemporaries with her luxurious attire.

A German visitor to England in 1598 described 'dresses so extremely magnificent, as to raise any one's admiration at the sums they must have cost'.

The St Faith's cloth - silk woven with strands of silver - dates from the last decades of the 16th century when such fabric would have cost the equivalent of three years' wages for an average labourer.

Its embroidery - caterpillars, butterflies, squirrels, stags, frogs, flowers and rowing boats in coloured silks with gold and silver threads - makes it even more expensive.

'It's incredibly valuable,' Borman said. 'It's so exciting.'

The queen's dresses were so precious in their day that, after she stopped wearing them, they were cut up and recycled for different purposes - like cushions - or given away.

Royal account books record such gifts to Parry.

Borman said: 'Cushions get a fair battering, whereas an altar cloth is a venerated object. I think that [may explain] its remarkable survival.'

Dress to impress: Queen Elizabeth I was known by her 16th century contemporaries for her luxurious attire

The cloth is large, measuring more than 2 metres by 1 metre, and was retired from its altar use more than a century ago.

Bacton was the birthplace of Parry, who began her 57-year service supervising the royal cradle rockers.

She died as Elizabeth's Chief Gentlewoman of the Bedchamber.

Borman said: 'Blanche was the benchmark by which Elizabeth measured all her other ladies because she was utterly loyal. She didn't have a personal life. She didn't marry.

'Nothing came in the way to her service to Elizabeth, who absolutely adored her.'

Parry's heart is interred at St Faith's, which also has a monument depicting her kneeling beside a godlike Virgin Queen.

The altar cloth donation might have been a similar act of veneration.

Borman spotted the cloth while researching Elizabeth I, visiting the 'idyllic' church to view the Parry monument: 'It was only because I was having a wander round the church that I saw this extraordinary material on the wall. It was one of those chance discoveries.'

Eleri Lynn, HRP dress curator, said: 'Generally, cloth of silver is reserved for members of the immediate royal family only.

'It is also wrought in the most costly materials by skilled makers. This alone makes it an incredibly rare survival.

'Incredible find': Tracy Borman, Historic Royal Palaces joint chief curator and Tudor historian is excited by the discovery at St Faith's Bacton

'The connection with Parry and her receipt of dresses from Elizabeth I herself, and the resulting possibility that this was Elizabeth's own dress makes this one of the most important Tudor textiles in the world.'

She added that this was a skirt panel, judging from curved seams: 'Elizabeth only had two embroiderers and two tailors, which she had on retainer for her entire reign.

'This panel, from later in her reign, would be the work of embroiderer John Parr and tailor William Jones.'

Borman will include the discovery in her new book, titled The Private Lives of the Tudors, published by Hodder & Stoughton on May 19.

HRP, an independent charity, looks after the Tower of London, Hampton Court Palace, the Banqueting House, Kensington Palace, Kew Palace and Hillsborough Castle in Northern Ireland.

Although the cloth's condition is remarkably good, it needs conservation to preserve it. HRP then plans to display it, possibly at Kensington Palace.

Charles Hunter, church warden of St Faith's, which dates back to the 13th century, said: 'The altar cloth is one of our greatest treasures, and we have been trying for many years to find out more about it.

'It wasn't until HRP came to have a look at it that we realised we had a very precious object.

'We're looking forward to getting all the relevant agreements in place, so that HRP can conserve the altar cloth and look after it for us.