Picasso self-portrait found stacked against a bedroom wall with a Stubbs and a Munnings

The chance to own one of the great painter's works has come up - with a guide price of just £100,000.

The seven and a half inch by four and three quarter inch watercolour shows the artist naked in bed with one of his many girlfriends.

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It is being sold by an anonymous private collector, to the delight of the auctioneer who was called to value the painting along with works by two other well known artists.

It is considered rare in the art world for works by artists of such repute to be sold by regional auction house instead of the famous companies of London and New York.

But Duke's auction house in Dorchester, Dorset, is to sell the small watercolour by Picasso entitled "Etreinte" as well as equine paintings by the British artists George Stubbs and Sir Alfred Munnings.

The sexually-charged Picasso piece depicts the artist and his lover in bed and was probably painted in 1901 or 1902 when the artist was in his early 20s.

In 1969 the Spanish master was shown the painting and confirmed its authenticity on the reverse of the picture. He also recalled dedicating the cover of the sketchbook from which it came "Pour Louise".

Louise Lenoir, known as Odette, is thought to have been Picasso's first girlfriend in Paris.

Auctioneer Guy Schwinge said: "It was a breathtaking find to discover these paintings that were stacked against the wall of a house.

"To find just one of these works would have been incredible - but to find three was quite exceptional.

"Of course, everybody has heard of Picasso and this is an early work thought to be of him in a naked clinch with his girlfriend Odette."

He added that the guide price reflects the fact that the work is not one of Picasso's "iconic" pieces, is quite small, and is painted in water colour rather than oil.

However, it is generally known that lots can eventually be sold for many times their estimated value.

The same auctioneer was responsible for finding art worth millions in the terraced house of the late spinster and art collector Jean Preston.

At her home in Oxford they found a 19th century watercolour by the English painter Dante Gabriel Rossetti in the kitchen, and an oil painting by Sir Edward Burne-Jones, which was kept in the living room.

Treasures already taken from the house include a rare edition of the works of Geoffrey Chaucer found under a cardigan in a wardrobe. It was later sold for £74,000. And hanging behind the door in the spare bedroom were two lost 15th century Fra Angelico paintings worth an astonishing £1.7million.

Next month's auction by Duke's will include the work by Stubbs (1724-1806) which is thought to have been painted for John Thane, 10th Earl of Westmorland, who was Lord Privy Seal (1798-1806).

The painting is a typical work by the artist and depicts a grey horse against a dark background. It is signed and dated 1786.

The oil by Sir Alfred Munnings (1878-1959) is entitled "The Irish Grey Mare" and it retains the original giltwood frame by Townshends of Norwich.

It is an atmospheric and freely painted work and features in the artist's autobiography.

It does not appear to have been sold at auction before and Duke's are anticipating that it could sell for in excess of £100,000.

Mr Schwinge added: "Quality paintings of horses are always popular and the two we have by Stubbs and Munnings are fine works.

"Both have well deserved reputations as painters of horses and are truly masters of their craft.

"In fact, Stubbs dissected horses in order to make his paintings more accurate.

"It will be a great honour to sell these great works and already there has been a great deal of interest in them."