A treasure hunt that baffled thousands of people all over the world for nearly three years is over. The Golden Hare of "Masquerade" has been found--by a man whose dog led him to a stone that held a key clue.

Readers worldwide were given hundreds of clues to the location of an 18-karat-gold pendant shaped like a hare that was buried by writer Kit Williams in what was billed as one of the greatest publicity gimmicks of all time.

The Sunday Times reported that a 48-year-old used-car designer, who for 18 months had followed the clues set out by Williams in his children's fantasy "Masquerade," discovered the 8-inch, jewel-studded hare in a park in the Bedfordshire town of Ampthill, 40 miles north of London.

But the victor says he never solved the "master clue" supposedly hidden in the book.

"My dog found it for me," he said. "I was dead jammy lucky ."

The man asked that his identity remain a secret, according to the author and various British press reports, for fear of an "avalanche" of letters and phone calls from frustrated treasure-seekers.

According to Williams, who disclosed the find today, the car designer and his girlfriend were walking the man's dog last month in a park at Ampthill. His dog then ran off to relieve himself on a stone that bore a curious inscription from the 104th Psalm.

Seeing the quotation and drawing on partial hints he'd found in "Masquerade's" illustrations, the man concluded, "It could be here," Williams said.

After days of digging near the stone, often at night in the chill British winter--and after a phone conversation with Williams--the man hit pay dirt on Feb. 24 and found the terra-cotta hare-shaped vessel in which the pendant had been hidden.

He was exhausted from his digging and hospitalized briefly with flu, The Sunday Times said. Last Friday, standing on the spot where the vessel was found--with Williams, a representative for his publisher and a BBC television crew--the victor melted down the vessel's sealing wax and unwrapped the gleaming hare.

"It's gorgeous that it's been found," Williams said afterward. "I am so relieved it wasn't found by chance because someone was building a hotel or something."

Williams said today he first conceived the treasure hunt as a way to hold children's attention through his story of a magical hero named Jack Hare, who leaps among the heavens carrying a vital message from the moon to the sun.

"I wanted to do lots of super pictures in the book," he said, "and I thought, 'How can I make people look and look again and look again?' "

So Williams sprinkled the text and the pictures with hundreds of helpful hints and unhelpful red herrings, capped by a 20-word master clue that he said could be deduced only through close study of all the illustrations.

With British TV personality Bamber Gascoigne as witness, Williams buried the filigreed golden hare on Aug. 8, 1979. It was planted near a cross erected in honor of Catherine of Aragon, first wife of King Henry VIII, who lived for a time at Ampthill.

When Williams buried the hare it was worth the equivalent of $5,400. But today, the man who found it was quoted as saying that if it were auctioned now it might fetch up to 10 times its original value as a collector's item.

So successful was the device that, according to the British publisher Jonathan Cape, "Masquerade" has sold more than 1 million copies in Britain, with many bought in the United States, Israel, Japan and elsewhere abroad. It has even been made into a stage musical.

Irene Williams, a spokeswoman for the New York-based U.S. publisher of the book, Shocken Books, said the FBI even bought a copy of the book and asked trainees to try to break the code.

The man who finally found the treasure told The Sunday Times he had twice given away his copy of the book out of frustration.

He solved what Williams called "confirmer clues," designed to be useful only to someone who'd already cracked the master clue.

The first and most important of these was the legend "one of six to eight" under an illustration of a moon-lit hillock. The inscription was a reference to Henry VIII, who had six wives.

When the engineer's dog led him to the stone, and he discovered nearby the cross commemorating Catherine--then found out Williams had spent much of his childhood near Ampthill--he thought he was onto something.

Days of figuring and digging followed, and finally success.

The middle-aged man, pictured by The Sunday Times huddling under a cap and windbreaker, was described by Williams as "sort of a very quiet, thinking type. I've always said it would be found by a north country pigeon fancier or something like that. That's the sort of person he is."