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For more than 60 years debate has raged about the "real" location of the imaginary utopia of Shangri-La.

The earthly paradise in the shadow of the Himalayas was dreamed up by the author James Hilton in 1933 at a desk in his home in Woodford, east London.

That has not deterred researchers, explorers and more recently Chinese government officials from trying to pin down the exact location on the Chinese-Tibetan border which served as his inspiration.

Last week, the Chinese announced they had found it. They unveiled a £6 billion scheme to develop a remote, mountainous area straddling Tibet, Yunnan and Sichuan as a massive Shangri-La tourist attraction.

However, The Telegraph has been given access to new and previously unpublished research by an American lawyer, Ted Vaill, who has spent 20 years investigating Hilton's sources.

The Chinese, says Mr Vaill, are putting the new airports and hotels serving the newly-designated Shangri-La in the wrong place.

Instead of being, as the Chinese suggest, near Zhongdian, it is 200 miles away on the extreme south-eastern boundary of the region. Mr Vaill believes the ancient kingdom of Muli, an area the size of Wales between Doacheng, Zhongdian and Jiulong, is the real Shangri-La.

However, he is delighted that the bulldozers and cement mixers are going to the wrong place, for Muli is one of the very few places in China not trying to be identified as the legendary paradise.

"The people who live there are very happy with their lives," said Mr Vaill yesterday. "The only tourists who visit there are Tibetan Buddhist pilgrims. Let other counties build their airports and hotels - but leave these people in peace.

"There is no question in my mind that this is the place that inspired Hilton."

Hilton, a journalist who wrote book and theatre reviews for, among others, The Telegraph, travelled no further than the British Library for his own research for Lost Horizon.

His fantasy about a group of Westerners whose plane crashes in the Himalayas, stranding them in an idyllic kingdom of peace and harmony, had an immediate appeal in an age of rampant hatred and warmongering. Frank Capra turned it into a Hollywood classic starring Ronald Colman and Jane Wyatt.

Over the years, many communities on the Tibetan-Chinese border have laid claim to be the setting of the mystical kingdom of Shangri-La. In Yunnan, two towns, Deqin and Cizhong, say they are its inspiration. Last year, the Chinese cabinet intervened to allow Zhongdian county to rename itself Shangri-La.

But the neighbouring Sichuan counties of Daocheng, Xiangcheng and Derong also claim to be the original model for the story. And dozens of other villages and towns dotted all over Sichuan and Yunnan appear to have taken the unilateral decision to rename themselves Shangri-La.

Mr Vaill's imagination was sparked years ago when he met a fellow lawyer and mountaineer, Peter Klika, who was intrigued by some articles he had found in some old National Geographic magazines in a dusty old bookshop.

The magazines, dating from the early 1920s and late 1930s, recorded the exploits in four or five articles of the famed Austrian-American botanist Joseph F Rock, mainly in Sichuan province that was then part of Tibet.

But it was one particular part of Sichuan that excited Mr Vaill and Mr Klika's attention: a long-forgotten mountain kingdom that used to be an autonomous region under the absolute control of an independent monarch.

Mr Vaill concluded that this tiny region was the model for James Hilton's Shangri-La. The two lawyers researched Tibetan topography and Hilton's book before launching an expedition to Tibet and the lost kingdom in 1989.

What they discovered was a tiny area, so mountainous and so hidden that their journey took four days by jeep and then horseback and finally 10 days on foot. The few roads they encountered were often washed out by landslides.

But, at the end of their journey, they discovered "a magical place" with a lush, verdant valley, a monastery and a village. He and Klika identified 22 points of similarity between the site and Hilton's Shangri-La.

The two men then determined to make a documentary about their search for Shangri-La, and they managed to track down Jane Wyatt, now 93, the last surviving cast member of the film, who had met Hilton. She told them that Hilton had hinted that his inspiration came, in part, from Rock's articles.

The clues to the real Shangri-La in Lost Horizon are many and detailed.

In the story, the crashed plane party soon find themselves the guests of a European, 163-year-old Catholic priest who is now High Lama of a Buddhist monastery on the side of a mountain.

A beguiling building, the lamasery has central heating, bathtubs from Akron, Ohio, a grand piano, and all the great works of literature and music collected over the centuries in a great library.

It overlooks an impossibly verdant valley, overshadowed by the dazzling, hypnotic icy peaks of a mountain called Karakal - "a perfect cone of snow" that appears to possess holy powers.

It was not difficult for any Lost Horizon fan to see that there were eerily similar references between Rock's articles and Hilton's book.

In the October 1930 edition, for instance, Rock mentions the gated town of Tatsienlu at the very threshold of the mysterious kingdom of Muli and reveals it is famous for the Tibetan tea that merchants sold from caravans.

In Lost Horizon, there is a town famed for its tea merchants at the very threshold of Shangri-La. It is called Tatsienfu.

In the July 1931 issue, Rock describes the "finest mountain my eyes ever beheld": Mount Jambeyang, "a perfect pyramid".

In the area he pinpointed, Mr Vaill discovered a dazzling mountain - "a perfect cone of snow" overlooking an impossibly verdant valley - that he feels certain was the inspiration for Hilton's Karakal.

There are many more matches. Rock describes a meeting with the king of this tiny kingdom on the Tibet-Chinese border. Descriptions of both the king and the meeting were not dissimilar to Hilton's account of the High Lama in Lost Horizon and their many philosophical encounters together.

Mr Vaill even came across a community of people who claim to be more than 100 years old - including one man who claims to be 152.

Perhaps Shangri-La really does have the secret of eternal youth.