It is believed to be a 'deviant burial', where people considered the 'dangerous dead', such as vampires, were interred to prevent them rising from their graves to plague the living.
In reality, victims of this treatment were social outcasts who scared others because of their unusual behaviour. Only a handful of such burials have been unearthed in the UK.
The discovery is detailed in a new report by Matthew Beresford, of Southwell Archaeology.
The skeleton was found by archaeologist Charles Daniels during the original investigation of the site in Church Street in the town 1959, which revealed Roman remains.
Mr Beresford said when Mr Daniels found the skeleton one of the first things he did was to check for fangs in a light-hearted way.
"In the 1950s the Hammer Horror films were popular and so people had seen Christopher Lee's Dracula so it would have been quite relevant," said Mr Beresford.
In his report, Mr Beresford says: "The classic portrayal of the dangerous dead (more commonly known today as a vampire) is an undead corpse arising from the grave and all the accounts from this period reflect this.
"Throughout the Anglo-Saxon period the punishment of being buried in water-logged ground, face down, decapitated, staked or otherwise was reserved for thieves, murderers or traitors or later for those deviants who did not conform to societies rules: adulterers, disrupters of the peace, the unpious or oath breaker.
"Which of these the Southwell deviant was we will never know."
Mr Beresford believes the remains may still be buried on the site where they originally lay because Mr Daniels was unable to remove the body from the ground.
He said: "If you look at it in a spooky way you still have the potential for it to rise at some point."
Mr Beresford added: "Obviously this skeleton comes from a time in Southwell's history that we don't know much about."
John Lock, chairman of Southwell Archaeology, said the body was one of a handful of such burials to be found in the UK.
He said: "A lot of people are interested in it but quite where it takes us I don't know because this was found in the 1950s and now we don't know where the remains are.
Mr Lock said no one could be sure why the body was staked in the way it was.
He said: "People would have a very strong view that this was somebody who, for whatever reason, they had a reason to fear and needed to ensure that this person did not come back."