Sufferers of osteoarthritis might be getting some pain relief from a fungus that lives on caterpillars found in China.

A fungus found on caterpillars could be used to relieve pain in osteoarthritis sufferers, according to British researchers.

Scientists at the University of Nottingham said that while their study of cordyceps mushrooms, commonly used in Chinese medicine, was a "long shot", their tests led them to believe it could be an effective painkiller.

Arthritis Research UK have awarded a three-year grant of STG260,000 ($A503,486) to fund further development with the hope clinical trials in humans could start within six to ten years.

Cordycepin, a chemical compound found in the mushrooms, was given to rats and mice in food pellets, and a pilot study found it could work, lead researcher Dr Cornelia de Moor said.

"When we first started investigating this compound it was frankly a bit of a long shot and there was much scepticism from the scientific community," she said.

"But we were stunned by the response from the pilot study, which showed that it was as effective as conventional painkillers in rats.

"This study is the first step in a potential drug development for a new class of drugs for osteoarthritis, although there are a number of hurdles we have to go through - necessarily so - before it gets nearer patients.

"To the best of our knowledge, cordycepin has never been tested as a lead compound for osteoarthritis pain."

Osteoarthritis is a common joint condition that affects about 1.8 million people in Australia, according to the Australian Institute of Health and Welfare.

Cordycepin is said to work as an anti-inflammatory and scientists will aim to discover whether it can prevent pain after an injury as well as relieving existing pain, or even work as a possible treatment for cancer.