British experts think that the drug, N-nonyl-BNJ, could be used in combination with other therapies to increase the number of people who can be cured.

So far the treatment has been used with some success against a similar virus to the hepatitis C virus (HCV), as HCV cannot be grown artificially for lab experiments.

But Dr Timothy Block, from the Thomas Jefferson University in Philadelphia, who has developed the drug, believes it could eventually work against both HCV and Hepatitis B.

As many as one in 100 people in the UK are thought to carry HCV, which can damage the liver so badly that a transplant is needed to prevent death.

Sugary secret

Viruses spread by multiplying inside cells, then breaking through the cell wall to spread elsewhere.

To slip through the cell membrane, they develop a sugary coat, and the new drug works by inhibiting this process.

So far it has only been successful against a cow virus, as HCV cannot be grown artificially in a laboratory.

Dr Block said: "This is the first drug since alpha-interferon to my knowledge for which there is published experimental evidence against HCV."

However, a British expert said there was still a long way to go before the treatment would be in routine use.

Dr Graham Foster, senior lecturer in hepatology at St Mary's Hospital, Paddington, said it represented a "promising development", and could probably eventually be used in combination with other drugs.

He said: "It may stop the viruses getting out of the cell, but if they continue to accumulate, the cell may burst eventually anyway.

"The drug has never actually been used on patients to any great degree."

Costly treatment

He said that HCV was "public enemy number one" in the UK, with an estimated one in 100 people infected.

"The problem is, there are so few treatments."

About 30% of long-term carriers of the virus will develop cirrhosis, or liver cancer.

The current treatment, interferon, when combined with another drug, cures about 40% of those carrying the virus.

But a 12-month course costs £10,000, and involves unpleasant side-effects.

The principal cause of new infections is sharing needles for intravenous drug use, and the number of people presenting with symptoms is projected to rise sharply over the next decade to reflect a rise in the number of needle-users two decades ago.