Forlorn traces of England's most notorious pogrom against witches appear to have been unearthed by water engineers engaged in humdrum improvements to a Pennine reservoir.

A buried cottage with a sealed room and a mummified cat bricked up in a wall has been discovered in the heart of the "witching country" of Pendle in Lancashire.

The gruesome tomb had been hidden for at least a century under a grassy mound at Lower Black Moss, whose catchments provide water for homes and businesses across north-west England.

The site is close to the supposed location of Malkin Tower, a ruin whose name echoes the spectral witches' cat Graymalkin in Macbeth. Three wizards and 17 witches were alleged to have plotted there to blow up Lancaster castle in 1612, to free an 85-year-old woman and her daughter accused of selling themselves to the devil.

History has never decided whether there was a genuine occult conspiracy or if terrified village herbalists were set upon for religious reasons or because of feuds.

The latest find could provide evidence for the kinder explanation, if forensic archaeology directed at cooking traces and domestic rubbish yields more information.

The practice of walling up a cat, with the animal sometimes still alive, is known to have been a medieval precaution against evil spirits. The tradition survived into later centuries in remote areas such as the high Pennines.

Carl Sanders, project manager for United Utilities, which routinely commissions archaeological surveys on its construction sites, said: "The building is in remarkable condition. You can walk through it and get a real sense that you're peering into the past.

"Pendle Hill has a real aura about it, and it's hard not to be affected by the place. Even before we discovered the building, there were lots of jokes from the lads about broomsticks and black cats. The find has really stunned us all."

Simon Entwistle, a historian of the Pendle witches, said that the discovery was "like Tutankhamun's tomb" for enthusiasts – and also very well-timed for Lancashire's specialist tourism market based upon the Pendle witches.

Entwistle said: "We are just a few months away from the 400th anniversary of the 1612 trials which ended with 10 hangings, and here we have an incredibly rare find, right in the heart of witching country.

"This could even be the famous Malkin Tower, which has been a source of speculation and rumour for centuries. Cats also feature prominently in folklore about witches. It's an absolutely spellbinding discovery."

Frank Giecco, who led the excavation team from NP Archaeology, said: "It's like discovering your own little Pompeii. We rarely get the opportunity to work with something so well preserved. As soon as we started digging we found the tops of doors, and knew we were onto something special.

"The building is a microcosm for the rise and fall of this area, from the time of the Pendle witches to the industrial age. There are layers of local history right before your eyes."

Items discovered at the site include indications of the building's gentler use, between the witches' time and the late 19th century, when the cottage appears to have been abandoned, buried and forgotten. The finds include 19th century crockery, a bedstead, tin bath, and a Victorian cookery range still in its original position – and without any nasty surprises.