One of the most famous practical jokes in British military history has returned to haunt the Royal Navy – more than a century later.

A previously unknown letter has surfaced, detailing the "shriekingly funny" Dreadnought hoax of 7 February 1910, when members of the Bloomsbury group of writers and artists donned beards and costumes to disguise themselves as Abyssinian princes and gained access to the pride of the British naval fleet.

The letter was written by Horace de Vere Cole, who described how he and five friends, including the novelist Virginia Woolf and painter Duncan Grant, duped an admiral and the crew of the battleship HMS Dreadnought, flagship of the home fleet.

Four of them pretended to be Abyssinians and two claimed to be their Foreign Office guides. Even Woolf's cousin, one of the naval officers on board the ship, failed to recognise the author in her fake beard.

Once on board, the visitors were given the full red-carpet treatment: a band played, the crew saluted them and African flags were hoisted to the masthead. When invited to dine with the officers they declined, in their version of Swahili – seemingly translated by Woolf's brother, Adrian Stephen – because the food and drink had not been prepared correctly. The group actually feared that their fake beards would fall off.

Reports of the hoax – three double-sided sheets long – made the newspapers a few days later and provoked questions in parliament that led to a tightening of regulations for ceremonial parties.

The letter was written by Cole to a friend a day after the hoax. Noting that, "the idea was mine, but the carrying out was the work of six," Cole wrote: "The interpreter, the four princes and an officer went over the ship talking gibberish fluently … We departed to the band strains and the company of marines drawn up and the staff at the salute once more.

"It was glorious! Shriekingly funny – I nearly howled when introducing the four princes to the admiral and then to the captain, for I made their names up in the train, but I forgot which was which, and introduced them under various names, but it did not matter!

"They were tremendously polite and nice – couldn't have been nicer: one almost regretted the outrage on their hospitality."

The hospitality extended to a carriage for the group's journey to London from Weymouth.

Cole added: "I was so amused at being just myself in a tall hat – I had no disguise whatever and talked in an ordinary friendly way to everyone – the others talked nonsense. We had all learned some Swahili: I said they were 'jolly savages' but that I didn't understand much of what they said … It began to rain slightly on the ship and we only just got the princes under cover in time, another moment and their complexions would have been running – Are you amused? I am … Yesterday was a day worth the living."

The letter has been brought to light by a descendant of its original recipient and is being offered for sale by Rick Gekoski, a London dealer in rare books and manuscripts, who said: "Just imagine trying to do such a thing now. This is elegant and audacious, very Edwardian."

The letter is accompanied by an original photograph of the friends in "Abyssinian" costume, annotated by Cole with their fake names.

Martyn Downer, the author of Cole's biography, The Sultan of Zanzibar, described the letter as particularly interesting as most of Cole's papers were destroyed or lost. "Although he was born to a great fortune, he lost it all and ended his life in great penury," he said.

The Navy did take revenge on one of the hoaxers. Three sailors abducted Grant and took him to Hampstead Heath, where they were reported to have caned him.