A horse thought to be extinct for 1,000 years is alive and well and living in Rutland. Celebrated in the ancient world as a chariot horse for racing and in battle, and presented to kings and emperors as a valuable gift, the Caspian horse was thought to have disappeared in antiquity.

Drawings of the distinctive horse can be seen on 3,000-year-old terracotta plaques in the British Museum and on the seal of Darius the Great from Persepolis in ancient Iran. They were probably used to pull chariots in the battle.

In 1965, a small but beautiful horse was discovered in a remote village in Iran on the shores of the Caspian Sea, being used to pull carts. Louise Firouz, an American who was married to one of the Shah of Iran's sons, bought it for her children to ride. She realized the horse belonged to a unique breed with great qualities of speed and temperament. There were still five pure-bred animals in the village and she managed to buy three. Later other horses were found, including some wild ones in the mountains.

Nearly 40 years later, with the help of the latest DNA technology, enough pure-bred horses of different strains have been found to ensure genetic diversity and the survival of the species.

To celebrate, the president of the worldwide Caspian Horse Society, Pat Bowles, who lives in Rutland with 16 of the pure-bred horses, has organized a conference from August 11 to 13 at which Louise Firouz will be speaking. Caspian enthusiasts from around the world will discuss a further breeding program and hold a breed show at Castle Bytham, near Oakham, on August 14.

Ms Bowles said that although the Caspians were smaller than modern horses - about 11.3 hands compared with a modern racehorse at 16 - they were as fast. She breeds both.

"They have light frames and thin bones which are incredibly strong. They are not like ponies, which are piggy and can be bloody-minded. They are slim, narrow, elegant and fast."

Pure-bred brood mares are worth between £2,000 and £3,000. There are still wild Caspians in the mountains in Iran and the government has banned their export, fearing that they will be lost to the country. Iranian experts are speaking at the Rutland conference.

There are now 1,300 pure-bred Caspians registered with the society and a further unknown number in Iran. Horses still being found in rural Iran are tested to check if they are pure-bred Caspians, and if so become valuable animals.