A rare chandelier by sculptor Giacometti is the centrepiece of a festival marking the centenary of Hampstead artist John Craxton.

The painter hung the bronze artefact in his Kidderpore Avenue home after buying it in a Marylebone antique shop for £250.

Now valued in the low millions, he recognised it as a one-off piece made for his mentor, the art collector Peter Watson which once hung in the offices of Horizon Magazine. It's exhibited at Norfolk's Holt Festival this month alongside paintings and letters by Craxton and his circle including Lucian Freud, Graham Sutherland, John Piper, Jacob Epstein, Ben Nicholson and Eduardo Paolozzi. There is also a 1941 drawing Two Shelter Sleepers by Henry Moore, who was a visitor to Craxton's home.

James Glennie, fine art curator for the Festival says: "We are very excited at the prospect of putting on this highly significant show. John Craxton was friends with many key players in mid-20th Century art in Europe. He was influenced by Picasso and we are fortunate to have Picasso ceramics for this exhibition. Also of importance is the recently-rediscovered Alberto Giacometti chandelier which was owned by John Craxton and has never before been exhibited publicly."

Ham & High: Chandelier for Peter Watson by Alberto Giacometti hung in the music room at Craxton Studios, 14, Kidderpore Avenue.Chandelier for Peter Watson by Alberto Giacometti hung in the music room at Craxton Studios, 14, Kidderpore Avenue. (Image: Estate of John Craxton)

Glennie adds that while many of Giacometti's bronzes were in multiples, this was unique: "The chandelier was commissioned by Watson and hung in the offices of Horizon Magazine in Bedford Square Bloomsbury in 1949. Sadly the magazine closed down a year later, then in the mid 60s it turned up again in a shop in Marylebone High Street."

John's parents Harold and Essie bought Craxton Studios in 1946 after their home in Grove End Road, St John's Wood suffered bomb damage. Harold was a Professor at the Royal Academy of Music and the studios offered space for his piano and six children. Their bohemian house became a focal point for artists and musicians including Benjamin Britten, and Sir John Betjeman, and their children included distinguished oboist Janet Craxton and John, who divided his time between Crete and Hampstead from the 1970s until his death in 2009.

Ham & High: Margot Fonteyn and John Craxton in Nafplion Greece, 1951 according to Ian Collins' biography John Craxton A Life of Gifts, the pair had a brief affairMargot Fonteyn and John Craxton in Nafplion Greece, 1951 according to Ian Collins' biography John Craxton A Life of Gifts, the pair had a brief affair (Image: Costas Achillopoulos)

A contemporary of Lucian Freud - who also grew up in St John's Wood - Craxton attended the Central School of Arts and Crafts and Goldsmiths and held his first solo show in 1942 in the Swiss Cottage Cafe. At the time, he and Freud shared an intense friendship and a studio at 14 Abercorn Terrace, St John's Wood - funded by Watson. They left after neighbours complained about Freud's girlfriends ringing the doorbell, and the smell from the dead animals they painted.

"They were extremely close friends for over a decade until they fell out over the sale of a picture," adds Glennie. "We are showing for the first time correspondence from Lucian Freud to John Craxton."

Ham & High: 14 Kidderpore Avenue was built in 1901 as a family home and studio for artist George Hillyard Swinstead and is today rented out to musicians and film crews14 Kidderpore Avenue was built in 1901 as a family home and studio for artist George Hillyard Swinstead and is today rented out to musicians and film crews (Image: Courtesy of Craxton Studios)

A mix between Edwardian and Arts and Craft, the studios were built in 1901 as a family home and studio for artist George Hillyard Swinstead. Today it's rented out to jazz, rock and classical musicians for rehearsals and recordings, and for film shoots from Ricky Gervais' sit com Afterlife, to The Theory of Everything.

Jane Craxton, who lives in the "quirky" house says: "Grandmother lived until 1977, then Janet was in situ with her husband Alan who were both professors of music and used it for teaching and rehearsals. Uncle John came and went to Crete but always had a room here, and later a studio".

"We're a reasonably well kept secret, it's still a family house but also somewhere people come to rehearse and make music. It's held in high esteem by the music community who find it homely and welcoming. Nothing much has changed since the 1930s - we only got Wifi a couple of years back. It's very much decorated to John's artistic taste, the walls are Mediterranean blue, the ceiling is yellow. We invented the concept of shabby chic. Magazine photoshoots marvel at the slightly knocked about furniture and cobwebs. People step through the door and say it feels like Dumbledore's house. There's a special magical atmosphere. We are very lucky living above the shop."

Ham & High: Reclining Figure with Asphodels IReclining Figure with Asphodels I (Image: ©Estate of John CraxtonDACS.)

A new biography of John Craxton by Ian Collins includes a chapter on family life at 14 Kidderpore Avenue, and describes how moving to Greece helped him flee post war homophobia.

"It shows what it was like to be a Craxton, growing up in a pretty anarchic household full of unique personalities," says Jane. "My grandparents were known for their warm hospitality and artists, musicians and actors visited. My grandmother was a free spirit who understood artistic temperament, for the children there was very little discipline and a lot of freedom, it seemed you could do whatever you liked as long as you were good at it."

She recalls Uncle John "could be very charming and very difficult".

"He was highly critical, intolerant and opinionated, but also loved parties - he didn't behave like a conventional adult, he kept something of his boyish delight."

He left his belongings including the chandelier to a trust, which removed them for safekeeping. Of the artwork she says: " It didn't mean much to me. I didn't realise it was a significant piece of art."

With one of Craxton's paintings selling recently for $400,000, Glennie hopes the centenary will raise his profile.

"He certainly deserves to be more of a household name and I hope this exhibition and others will help bring his name to the fore. His story is quite remarkable - how he progressed from being a very capable artist in the circles of Lucien Freud, and blossomed from slightly dour wartime pictures to brightening up considerably the moment he arrived in Greece."

Craxton-Picasso runs at Holt Festival July 16-31. Visit www.holtfestival.org/fine-art/craxton-picasso/