The sites of eight huts have been excavated. Each is about five metres square with a clay floor and central hearth. Post holes mark the homes' outline and slots the planks for bed frames and cupboards. Two grander buildings, surrounded by fences and ditches, may have been the homes of chieftains or priests - or possibly the spirits. The more modest houses were found littered with debris, including pot shards and tools. But no household waste was found in the larger ones, suggesting that for ritual purposes they may have been kept empty except for a constantly tended fire.
The scale of the discovery stretches far beyond the handful of excavated sites. A ground-penetrating radar survey funded by English Heritage suggests they are part of a huge settlement.
Mike Parker Pearson, of Sheffield University, who has been excavating the site for years, said there might be dozens or even hundreds of hearth sites: "The whole valley appears full of houses."
Carbon dating puts the settlement at about 2,500 BC, just when the first stones were being placed at the most famous prehistoric monument.
The finds back Dr Parker Pearson's belief that the stone circle was a place of the dead, linked by a broad stone-paved track to the timber circles at Durrington Walls. Dr Parker Pearson announced his discoveries at a press conference in the US, sponsored by National Geographic.