Workers renovating a former royal palace in the Nepalese capital have discovered a huge stash of gold and silver ornaments weighing more than 300 kilograms (661 pounds), the government said Tuesday.

Three boxes of treasures, thought to be more than 500 years old, were hidden in a store room under the sprawling 16th-century Hanuman Dhoka palace, a UNESCO world heritage site, a spokesman for the culture ministry told AFP.

"There are coins and ornaments that look like offerings to the gods and goddesses," said the spokesman, Jalkrishna Shrestha.

Only one box has been opened so far and its contents would be worth about 17.5 million rupees ($233,334) on the local gold and silver markets, according to an AFP calculation.

The other two boxes will be opened later this week.

"We expect to find more such treasure as the renovation continues," Shrestha said.

The 4.5-million-rupee government restoration project at the dilapidated palace, which housed Nepal's royals until the late 19th century and is now a museum, began two months ago and will go on until September.

The palace in Kathmandu, with intricately carved features and several courtyards, was named after the Hindu monkey god Hanuman. It was built by Malla rulers who were defeated by Prithvi Narayan Shah, the founder of Nepal in 1768.

The palace also served as a venue for the coronation of the country's kings until the monarchy was abolished three years ago.

Nepal's former king Gyanendra was deposed in 2008 after Maoist rebels who fought a decade-long battle against the country's centuries-old Hindu monarchy came to power.

Gyanendra, who was widely disliked, came to power in 2001 after the former crown prince shot and killed nine members of his own family including the king and queen, before turning his gun on himself.