Charles Rennie Mackintosh's first major frieze has lain hidden under several layers of paint for nearly a century in the Glasgow Art Club, but trustees are on the verge of launching a major fundraising campaign to bring the architect's "lost essay in interiors" back to life.

Painted in 1893, the stencilled frieze features sage-green thistles intertwining on a light-yellow background to create an art nouveau lattice. It was the centrepiece of the art club's gallery but, due to its position under the eaves, it suffered water damage and was eventually painted and plastered over.

The club's trustees believe that once restored, it will be the first stop on a Mackintosh trail around Glasgow. Experts claim the gallery houses the first shoots of the architect's celebrated style that would later bloom into his designs for the Glasgow School of Art.

The trustees are looking to raise £1 million privately and through conservation bodies for its restoration.

The money will also go to conserve the rest of the gallery, located in an elegant Bath Street townhouse, whose existing fireplace, grills and door fittings were also designed by Mackintosh when he was a 25-year-old assistant for the firm Honeyman and Keppie.

"The only thing that is missing is the frieze, and when it is put back you will have the complete interior," said Dr James Macaulay, retired head of architectural history at the Mackintosh School of Architecture and a Glasgow Art Club trustee. "It's an interesting interior because it is by a young man; it is transitional.

"You can see, if you have an eye, what is going to come along in places like the Glasgow School of Art and Hill House. You can see the germ of all that. So the interior of the art club pre-dates any other substantive interior work by Mackintosh by about three years."

Mackintosh's influence over the art club gallery, described by art historian Sir Kenneth Clark as "one of the most perfect small galleries in Europe", was relatively unknown until recently. The very existence of the frieze was lost knowledge until 2000.

When the art club opened its doors in June 1893, several articles were published celebrating the gallery space, built over the townhouse's garden. As was the practice in those days, all credit went to James Keppie, the junior partner of the firm. Mackintosh's name appeared nowhere.

Several theories for this have been offered, ranging from the young architect spurning the advances of Keppie's sister, to merely not being a member of the club. Mackintosh did not take this omission lightly. He persuaded The Bailie, a weekly Glasgow magazine, to publish his own drawings for the gallery, including the frieze.

"I think Mackintosh was rather upset," said Macaulay. "He was a rather prickly character, that all this praise was being heaped on John Keppie, and he wasn't getting a single mention."

Macaulay uncovered The Bailie from June 1893 as well as a contemporary newspaper illustration of the gallery, featuring the frieze in the background.

The club paid for investigative work in 2001 that discovered original paint samples in the gallery. The club is only now, however, in a position to raise money for the frieze's restoration and replication. It hopes to be completed in the next two years.

Charles Anderson, the art club's president, said he wanted to use the frieze and Mackintosh's influence on the gallery to increase public access to what is still a private club.

"We really need to make this a part of Glasgow's heritage," he said. "We would like to get it as the first stop of a Mackintosh trail. That could really put the art club on the map. At the moment it is Glasgow's best-kept secret."

Previous members of the club include the Glasgow Boys. It currently has around 400 members, ranging from artist Peter Howson to comedian Billy Connolly.

A formal application for a grant has been made to the Heritage Lottery Fund. It confirmed a decision will be made in March.

Ranald MacInnes, Historic Scotland's principal inspector, said: "The building has an important interior that has a strong connection with Charles Rennie Mackintosh, whose firm remodelled a 19th-century terrace house for the art club.

"It's nationally important and we welcome its conservation. We have had very preliminary discussions with the art club about the potential works and recommended a conservation plan be included as part of the plans."