Amateurs using metal detectors have found record amounts of golden treasure and priceless scraps of history across England, according to an annual report from the British Museum.

All the items were reported to archaeologists under a scheme which the museum’s director, Neil MacGregor, called “quite unique in Europe”.

MacGregor recently presented the successful Radio 4 series, A History of the World in 100 Objects.

The report shows that 2010 was an exceptional year, with 859 treasure discoveries (up by 10%) and 90,146 other finds (up 36%).

The finds are helping draw new maps of invasion, settlement, trade and warfare across thousands of years of English history.

All were reported through the treasure and portable antiquities schemes based at the museum, which maintains a network of finds officers across England.

As the detectorists and the officers have got to know and trust one another, reports of both treasure and other ancient items – such as bits of broken horse harness – have increased dramatically.

Since the portable antiquities scheme (PAS) was established in 1997, more than 700,000 finds have been reported.

It will cost about £1.3m in the next year but, according to arts minister Ed Vaizey, it is “very cost effective. That’s probably a very vulgar thing to say, but it is – and it’s the envy of the world”.

The finds often provoke awe, wonder or covetousness. But occasionally a discovery will elicit ribald laughter.

One such was a knife handle found in a field in Lincolnshire, and bought – for under £1,000 – by the Collection museum in Lincoln. The handle shows three people – a man, a youth and a woman – entwined in an erotic embrace. The youth is clasping a decapitated head to his chest.

“My colleagues are used to me talking about some amazing find that’s come in,” said Antony Lee, the archaeologist at the museum who was first shown the artefact by its finder, David Barker.

“This time there was quite a crowd in the staff room, and many unprintable comments. Other knife handles like this have been found – all from Britain – but nobody else has the decapitated head. Ours is unique in that respect.

“It is on display, but we haven’t had the nerve to bring it out for an education day yet.”

The display label says diffidently: “The significance of the decapitated head is unclear.”

Lee added delicately: “If you look carefully, you’ll see that the woman is the sleeping partner as it were.”

The British Museum report covers treasure finds, which must by law be reported, and other objects which detectorists are encouraged to report and can then keep or sell.

They include a hoard of 840 iron age gold coins from a dairy farm at Wickham Market, Suffolk.

Dave Breen, son of the landowner, recalled: “I got the call on April the first, and on the day my father retired, so I naturally assumed it was a wind-up.”

The hoard was the largest found since the 19th century and contained coins probably made for Boudicca’s Iceni tribe a few decades before she led a rebellion which torched Colchester and London.

The coins were valued at £300,000, a figure shared between finder and farmer.

A field in West Yorkshire yielded five fabulous pieces of gold, assumed to be a Viking’s loot, including a massive ring containing an ounce of pure gold.

It was, archaeologist Helen Geake said, “a ring of power – it could have been worn by a prince either of the church or state”.

Vaizey said: “Perhaps we could have one made for David Cameron, just to show the people the power and status that he now enjoys.”

MacGregor’s favourite find was a thumbnail sized 15th century gold locket found at Rolleston, Nottinghamshire.

This was inscribed Cauns repentir, meaning without regret – “the earliest reference in history to the title of the famous Edith Piaf song,” MacGregor said with tongue in cheek.

The British Museum has acquired it and put it with another found in Nottinghamshire in 1966. The items are so similar that they may have been made by the same goldsmith, and it is believed both were hidden during the trauma of the Wars of the Roses (1455-1485).

One of the humblest finds was George II penny carefully defaced by a sailor with a beautifully drawn phallus, found in the Thames by Steve Brooker, a tower block window installer who potters about in the mud on his days off.

“The finds reported through the portable antiquities scheme and treasure are changing our understanding of the past, helping archaeologists learn where people lived and died and how these finds were used,” MacGregor said.

“But what is truly exciting is that these finds are being made by the public, not in most cases by archaeologists, transforming the archaeological map of Britain.”