The archipelago is named after Robinson Crusoe, but perhaps it should have been called Treasure Island.

A long quest for booty from the Spanish colonial era appears to be culminating in Chile with the announcement by a group of adventurers that they have found an estimated 600 barrels of gold coins and Incan jewels on the remote Pacific island.

"The biggest treasure in history has been located," said Fernando Uribe-Etxeverria, a lawyer for Wagner, the Chilean company leading the search. Mr Uribe-Etxeverria estimated the value of the buried treasure at US$10bn (£5.6bn).

The announcement set off ownership claims. The treasure hunters claimed half the loot was theirs and said they would donate it to non-profit-making organisations. The government said that they had no share to donate.

It also prompted speculation about the contents of what is considered to be one of the great lost treasures from the Spanish looting of South America. Chilean newspapers were filled with reports that the stash includes 10 papal rings and original gold statues from the Incan empire.

The hoard is supposedly buried 15 metres (50ft) deep on Robinson Crusoe island, also known as the Juan Fernández island, home to Scottish sailor Alexander Selkirk, the adventurer immortalised by Daniel Defoe as Robinson Crusoe. Selkirk was dumped on the island and lived alone for four years before being rescued. His exploits brought worldwide attention to the islands.

For centuries treasure hunters have scoured the island in search of booty which was reportedly buried there in 1715 by Spanish sailor Juan Esteban Ubilla y Echeverria. Using everything from old Spanish ship manifests to teams of islanders with shovels and picks, foreigners have made so many claims of discovering the lost treasure that islanders are usually sceptical of the proclamations.

This most recent announcement, however, deserves greater credence because of the equipment used by the treasure hunters: a mini robot that can scan 50 metres deep into the earth. The robot, dubbed "Arturito", was invented by Chileans and over the past year has grabbed headlines by breaking some of the country's biggest criminal mysteries.

First, the robot detected the buried arsenal of a rightwing sect known as Colonia Dignidad. The guns and rocket launchers were buried at some 10 metres and while the authorities had searched for years, the robot found the buried weapons almost instantly. Then, in the case of missing businessman Jose Yuraszeck, Arturito was able to analyse the soil and identify the molecular composition of human bones, allowing investigators to dig straight to the body of the murder victim.