Construction of a £20m leisure centre has been halted after more than 500 skeletons dating back to medieval times were unearthed beneath the site.

Archaeologists discovered 25 crypts in Elephant and Castle, which were used to store remains, some of which date back to before the Black Death in the 1300s.

The team had expected to unearth the remains of a burial site but the extent of the findings was far greater than expected. They said there was “an unusual concentration of babies and children”.

The site, being developed as part of the £1.5bn regeneration of the area, is now the scene of a full archaeological investigation,

The remains have to be reburied, unless they pose any risk to health, in which case they would be disposed of as hazardous waste immediately.

Dr Patricia Dark, manager of Southwark Local History Library and Archive, said: “I think the find’s really fascinating.

“It’s great to have such a tangible link to the past – that bit of the Elephant is so close to the modern roundabout that we forget that for hundreds of years people lived and worked there, and called it home.”

The Ministry of Justice, which governs what now happens to the remains, has issued Southwark council with a licence to carry out the dig.

Council leader Peter John said: “The remains will be treated respectfully and we will be following the Ministry of Justice’s guidance to peacefully re-bury or relocate them. The leisure centre work will resume as soon as we’ve sensitively dealt with this issue.”