When Cyprus’s former president George Vassiliou made the official gift of an ancient vase to Margaret Thatcher in 1988, he assumed it would remain at 10 Downing Street.

Instead, more than three decades later, the sale at auction of the 2,700-year-old pottery has provoked diplomatic discomfort in London and disquiet in Nicosia.

Cypriot authorities want to know how an artefact bequeathed not as a personal gift but political gesture could ultimately go under the hammer for private gain.

“We’re seeking an explanation as to how protocol could have slipped like this,” said a government source on the island, confirming that the foreign minister, Nikos Christodoulides, had instructed Cyprus’s high commissioner in the UK to raise the issue.

The 12.6cm-tall vessel, described by Christie’s as “the property of a private individual”, fetched £6,000 when it was auctioned in May.

A note penned by Thatcher on a Downing Street envelope detailing the antiquity’s provenance is believed to have played a role in significantly raising its pre-sale estimate.

The vase fetched £6,000 when it was auctioned in May. Photograph: Christie's

Vassiliou, who held office between 1988 and 1993 as Cyprus’s third president, said his government gave the gift in recognition of Thatcher’s unstinting support in reuniting the island. A former British colony, the Mediterranean country has been split between Greek and Turkish Cypriots since 1974.

“It was a symbolic gesture,” he told the Guardian. “Margaret wanted so much to see a solution to the Cyprus problem and she spoke to everyone to try to promote our positions.

“She was more than helpful, she was genuine. We had very warm relations, but in truth I felt obliged to give her this gift not as an individual but as head of state to a prime minister. In reality it should have remained in Downing Street. How it ended up at her home and then Christie’s, I simply don’t know.”

Although the vase, which dates to the Cypro-Archaic period, is neither unique nor of immense art-historical value, it is, like most antiquities from Cyprus, a token of national pride. The then president was required to seek approval from the antiquities department before removing it from the island.

The sale came to light when Maria Paphitis, an art historian researching Cypriot pottery, happened to notice the vessel in an auction of nearly 200 personal items that had belonged to Thatcher.

“It was totally spontaneous that I came across it, but once discovered, questions began to be asked,” said Paphitis, a former Christie’s employee before she returned to Nicosia.

She believes the sale should now be revoked. “People want an explanation. Some see it as a little bit of an insult that an antiquity given to a country as a gift should then be sold as a private item. As a matter of respect to the people of Cyprus, it should have remained in the prime minister’s collection.”

The auction was held to mark the 40th anniversary of Thatcher’s election as PM. Christie’s said all the artefacts – which also included an ostrich leather handbag and the hardstone “pebble” bracelet that she wore when she met Nelson Mandela in 1990 – were being sold “on behalf of the beneficiaries of Baroness Thatcher’s estate”.

The May sale attracted buyers from 36 countries and was part of a series of auctions that have raised more than £4.5m since Thatcher’s death in 2013.

Androulla Vassiliou, the ex-president’s wife and a former EU commissioner for health and education, has to date been the most unsparing on the issue, holding Thatcher’s children, Mark and Carol, to blame for the diplomatic faux pas.

“I am assuming that her children wanted to sell her possessions after her death and the vase was believed to be part of them,” she told the Cyprus Mail. “However, the ancient pottery was not given to her as an individual but should have remained at 10 Downing Street.”

Under current regulations, all ministers, including the prime minister, can retain gifts only if they are worth less than £140. Unless ministers purchase the gifts and pay taxes on them, all gifts worth more than that amount become the property of the British government.