A group of New Zealand scientists have discovered a biological control agent for Botrytis, one of the wine industry's most damaging diseases, it was claimed today.

Botrytis can be a friend or a major foe of the winemaker. In the right conditions, essentially damp mornings and dry afternoons, it leads to noble rot, an essential element in the production of some of the world's great sweet wines.

However in damp, humid conditions it creates grey rot, which can lead to a loss of colour and off-flavours, particularly in black grapes and can seriously affect both yields and quality.

However a team of scientists from HortResearch, funded by the Wine Institute of New Zealand and the New Zealand Grapegrowers Council, claim to have discovered a biological control agent for the disease.

A release today said the scientists believe a naturally occurring saprophytic fungus has the "potential to solve the international wine industry's billion dollar challenge when the Botrytis cinerea fungus occurs in humid conditions, causing major damage to grape crops".

A special purpose investment company is being formed to raise money to commercialise the discovery, which is to be marketed as Botry-Zen, and a prospectus is expected within weeks.

Dr Philip Elmer, part of the HortResearch team said: "Bunch rot is a major problem for the wine industry and the disease, also known as grey mould, is arguably the single most important disease problem confronting the international wine industry. With mechanical harvesting predominant in the industry, infected grapes cannot be separated from healthy ones at the time of harvest."

He continued: "One of the real attractions of Botry-Zen, is that it is completely organic, rather than chemical based, and it controls the Botrytis without affecting the grape."