The discovery of Captain Kidd's 300-year-old ship in the Caribbean could provide final proof that the Scottish privateer did not deserve to be hanged as a pirate and his rotting body left on public view.

The wreck of the fabled Quedagh Merchant has been located in 10ft waters off Catalina Island in the Dominican Republic, only miles from where Kidd left it when he sailed to Boston to try to clear his name in 1699.

“It would confirm that he was telling the truth,” said Richard Zacks, author of The Pirate Hunter: The True Story of Captain Kidd. “He has the reputation as a terrible fearsome pirate, when he considered himself an honourable privateer.”

The discovery of the Quedagh Merchant, a prize long-sought by treasure-hunters, was announced this week by a team from Indiana University after a tip-off from the owner of a nearby resort.

The ship's treasure of gold, silver, jewels and bales of silk had already been removed before it was scuttled in a river and set adrift, but the wreck contains about 26 cannons that were stacked in the hold.

“It's untouched. Nobody has looted it. Only the environment has touched it,” said Charles Beeker, the scuba-diving archaeologist who led the university expedition.

William Kidd earned a reputation as one of history's most notorious pirates because of his sensational trial and hanging at Execution Dock in Wapping, East London, on May 23, 1701.

During the execution, the hangman's rope broke and Kidd was hanged a second time. As was customary, his body was left for three tides of the Thames before it was put on display in an iron cage at Tilbery Point as a warning to others.

However, recent research suggests that Kidd was wrongly convicted of piracy, and was in fact an authorised privateer. He was commissioned as a privateer in 1696 in a letter of marque signed by the king, with authority to seize ships belonging to the enemy French.

Sailing in the Indian Ocean in January 1698, he captured the 500-ton Quedagh Merchant, a French-registered Armenian ship carrying goods part-owned by a minister at the court of the Indian Grand Moghul, who complained to the East India Company that it was failing to protect his ships.

Kidd sailed the Quedagh Merchant to Madagascar, exchanging it for his leaky ship, the Adventure Galley.

After his men mutinied, Kidd sailed the Quedagh Merchant to the Caribbean, where he discovered he was a wanted man. He loaded 75lbs of gold, 150lbs of silver and 40 bales of silk on to a smaller ship and sailed to Boston to plead his case — and was promptly arrested.

Kidd left the Quedagh Merchant in the hands of a merchant called Henry Bolton, but the vessel was plundered and set ablaze and allowed to drift for 3 nautical miles to where it now lies below the waves.

After inspecting the wreck, Mr Beeker said said that it appeared to be a ship that was scuttled. Particularly significant are the barnacled cannons, which he believed were stacked in the hold when Kidd moved from the Adventure Galley to the Quedagh Merchant. “What you have is cannon stacked in the cargo hold in opposite directions,” he said. “This was not a wreck. There are no deployed cannons.”

There is also an empty area in the middle of the hold that might have contained 70 tons of sugar that was part of the ship's cargo.

“As an archaeologist, I cannot say conclusively that it's Captain Kidd's ship, but as a betting man, I am betting on the ship,” Mr Beeker said. “The age of it is right; the stacking of the cannons; the missing section where the sugar may have been; no deployed cannons. Everything is adding up right. It's his ship.”

He said that the wreck supported Kidd's protestations of innocence. “I think he left a perfectly good ship there waiting to bring it in and satisfy his investors, and he got it under the French flag. So why is he a pirate?,” he said.

Mr Zacks, the historian, said that three years ago he went his own expedition in search of the Quedagh Merchant. Following eyewitness descriptions of the ship's scuttling, he searched within 500 yards of where the vessel was found.

While helping the Indiana University team, he snorkelled down to the wreck of the ship and hugged a cannon. “After three-and-a-half years of research in libraries, I actually got to touch one of the cannons,” he said in near-disbelief.

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