A possible Anglo Saxon timber structure, medieval houses and significant quantities of animal bone and pottery have been found.
However, the discoveries could prove a major stumbling block to plans for a much needed affordable housing scheme on Holy Island.
It is only a few weeks since Holy Island Community Development Trust submitted plans for a £500,000 development to create four much needed affordable homes at Sandham Lane.
Dick Patterson, Trust chairman, admitted: "It's given us a bit of a headache but we knew there was always a good chance there would be finds of archaeological interest on a place like Holy Island."
The Trust are worried they might now have to come up with thousands of pounds for more excavation work before they can take their scheme any further.
Another alternative which could be just as expensive, and possible not feasible in this instance, is to build a concrete raft to carry the houses over the sensitive archaeological deposits, thereby protecting them for the future when techniques for investigation could be even more advanced.
Geotechnical engineers from the archaeological investigation division of Ian Farmer Associates were called in by the Trust to carry out the excavations at the rear of the former Castle View guest house.
Dr Ian Stewart, who has been working on the dig, said: "I feel very much the person in the middle here, as my report will have a considerable bearing on how we proceed.
"It would be marvellous for the development to go ahead at the same time, however we must have a strategy for dealing with the archaeology which is potentially very significant.
"I think there will be a lot of discussion and debate on this one but hopefully an amicable solution can be dug out somewhere."
Islanders have had major problems buying homes on Holy Island in recent years because most of the properties coming on to the market have been snapped up as holiday homes, second homes or retirement homes.
This has pushed up prices making property too expensive for islanders, many of whom who have to manage on a low income.
"Islanders just can't compete with the prices some people are prepared to pay for second homes," explained trustee and retired island postmaster Ian McGregor. "House prices are going through the roof but it's the way the market place works and it's very difficult to do anything about.
"It makes it very hard for local people to get on the property ladder. Tourism and fishing are the main sources of work on the island but both tend to be low paid, with one being seasonal and the other very much dependent on the weather and the fish being out there to be caught."
The Trust's solution is to build and retain ownership of the affordable housing to provide this much-needed accommodation for islanders. They have successfully done it before with their Kyle Gardens scheme in 1999. It cost £400,000 to build the five new houses, which comprise three two bedroomed and two three bedroomed homes.
However, even this scheme had to be redesigned around the archaeology after medieval finds were made prior to work starting.
The Sandham Lane proposal is to build a terraced row with two blocks of two three-bedroomed houses. Part of the plan is for one of the ground level houses to be capable of being adapted for disabled use.
"We have been given money from the Tudor Trust to buy the land and pay the professional fees but we now have to look at how we are going to raise the rest of the money," said Mr McGregor.
The Kyle Gardens scheme was funded by the Tudor Trust, Berwick Borough Council, the Community Council of Northumberland and the private sector.



e-mail: iansmith@
tweeddalepress.co.uk