A British professor believes he has found a new antibiotic that could combat the MRSA superbug and is trying to raise £5m to fund its development.

The battle against bacteria once looked as if it had been won, but the recent emergence of new bugs that cannot be treated with conventional antibiotics has rekindled interest in the area.

Professor Colin Smith, of the University of Surrey, has found potential new drugs that kill such "superbugs" in a petri dish, and wants to raise cash from venture capitalists to see if they will work in humans. He has founded a company, RecombinoGen, chaired by Robert Mansfield, who used to run UK biotech Vernalis. Newcastle University's Dr Jem Stach also thinks he has found a potential new bug killer and is looking at commercialising it.

Smaller companies and academics are filling a gap in drug development. The traditional pharmaceutical industry has been reluctant to fund research for new antibiotics in recent years. There has only been one new class of antibiotics approved for sale in the past decade, and there are few possibilities being tested.

Since Alexander Fleming's discovery of penicillin in 1928, enough new antibiotics seemed to have been discovered to tackle known infections. The drugs then became old and therefore cheap, which made the market unattractive. "The reality is that there has been a disincentive to invest," said a spokesman for GlaxoSmithKline, one of the few large drugs companies to continue looking for new antibiotics. It wants governments to support new research.

The industry is caught in a catch-22. Testing the drugs is expensive. For instance, Sanofi Aventis's new antibiotic, Ketek, was trialled in 24,000 patients. But antibiotics have a naturally smaller market, particularly when compared with drugs that have to be taken for a long time, such as the cholesterol-lowering statins.

"Generally it is an acute market rather than chronic. You take an antibiotic for seven to 10 days and that is it," said Stewart Adkins, the pharmaceuticals analyst at investment bank Lehman Brothers. "You have to be sure there will be sufficient volume of people taking it to make it worth it."

But completely new antibiotics have an even smaller market, because they will only be used on rare occasions when a bug is completely resistant to other drugs.

"Doctors tend to keep novel antibiotics back until they get a bug they can't kill, because everyone is aware that if you use them willy-nilly you just get more resistance," added Mr Adkins.

The increased number of infections from "superbugs" has stimulated interest from drug companies and investors. "There was a lot of complacency ... that has changed now," said Sophia Tickell, who is researching the issue for React, a group of health professionals that is campaigning for more antibiotics to be discovered. "There is awareness that there is a problem there."

So far antibiotic resistance has been confined to hospitals and bugs such as MRSA and C Difficile, but the need could become more urgent. The Infectious Diseases Society of America presents an alarming picture of an outbreak of antibiotic-resistant salmonella, which, it says, could have killed 1,700 people within six days if a milk distribution facility had been contaminated.