Pre-dating the riverside Globe, the Curtain theatre, north of the river Thames in Shoreditch, was home to Shakespeare's company - the Lord Chamberlain's Men.

Remains of walls forming the gallery and the yard within the venue have been discovered by archaeologists from Museum of London Archaeology MOLA.L.

"This is a fantastic site which gives us unique insight into early Shakespearean theatres," said Chris Thomas from MOLA, who is leading the archaeological work.

The theatre was immortalised as "this wooden O" in the prologue of Henry V with the lines: "Can this cock-pit hold within this wooden O, the very caskes that did affright the Ayre at Agincourt?"

The discovery will delight historians and Shakespeare fans as excavations offer a picture of where the writer's early productions were performed, although little further detail is known about the early playhouse.

"This is an outstanding site - and a fortuitous find in the year of the worldwide celebration of Shakespeare," said Kim Stabler, Archaeology Advisor at English Heritage.

London has been celebrating its cultural heritage with a world Shakespeare festival taking place at the Globe theatre and across the UK, as part of a festival to coincide with the Olympics this summer and will last to November.

"The find is another wonderful opportunity to further our understanding of Shakespeare's theatres," said Neil Constable, Chief Executive of Shakespeare's Globe.

The Curtain Theatre opened in 1577 close to London's first playhouse "The Theatre" and was one of a number of early theatres built outside the city's walls.

The venue took its name from nearby street Curtain Close.

It was the main arena for Shakespeare's plays between 1597 and 1599 until the Globe was completed in Southwark, but it is unclear what happened to the playhouse after that when it seemed to vanish from historic records after 1622.

Some experts say it may have remained in use until the Civil War in the 1640s.

Archaeologists stumbled upon the Curtain Theatre's remains on Hewett Street after work began on a regeneration project led by local developers last October.

Soon after the remains were found on an exploratory dig, architects began drawing up plans to preserve the remains while allowing the development to go ahead.

A spokesman for Plough Yard Developments, the company leading the regeneration project with the Estate Office Shoreditch, said the excavations could become a preserved centrepiece of a new housing and shopping area.

The plans are set to go on display on June 8 and 9 at the site.

"Although the Curtain was known to have been in the area, its exact location was a mystery," the Plough Yard spokesman said.

(Editing by Paul Casciato)

• A Permanent Economic Emergency