It may only be the size of a five pence piece, but a computer part being developed in Sussex could lead to the most important discovery since the microchip.

The Squid (super quantum interference device) is being developed by Professor Terry Clark and his team at the University of Sussex.

They have been given £66,800 by Nesta (National Endowment for Science, Technology and the Arts) to investigate the potential of the technology which could form the component parts of circuits working millions of times faster and more powerfully than any current machine.

Prof Clark said: "We know in principle what this quantum technology could do but not in practice.

"If it works, the speed of quantum computers will outclass everything available - the jump will be like that from the abacus to the electronic computer.

"Although we do not know what kind of problems the new machines could deal with, my gut instinct is they will be able to do anything."

One of the potential uses of this technology could be indecipherable codes and encryptions.

The Squid is vital for the computer industry because manufacturing techniques are reaching the limits of what can be achieved using classical physics.

Prof Clark has been working on the potential uses of quantum technology for 25 years and it could be another decade before the Squid could be used for the mass market.

It is hoped within ten years the components of existing circuits will have become so small it will signal the end of the microchip as they will not be offer any further improvement in speed or efficiency.

Prof Clark said: "This could be one of the most important discoveries of the 21st Century.

"Like the mobile phone, people 200 years ago would think that was magic, this looks like magic now but if it works it will run and run and run."

The Nesta award is one of 30 given to creative people and innovative projects aiming to bring social, economic and cultural benefits to society.

Prof Clark's team also received a Nesta award in 1999.

He said: "It's very important projects like this receive funding from bodies like Nesta. Without it these breakthroughs wouldn't happen."