A Waikato woman is behind "ground-breaking" research she says could lead to the cure of type 1 diabetes within a year if funding can be found.

Matamata-based Noela Vallis, president of the New Zealand Spinal Cord Society, said stem-cell therapy being developed in the organisation's Dunedin laboratory had potential to cure the auto-immune disease that affects more than 20,000 New Zealanders.

Diabetes leads to a buildup of glucose in the bloodstream, which, untreated, can lead to dehydration and cause diabetics to go into a coma.

The trials, led by Dr Jim Faed and scientist Dr Paul Turner, focus on a gradual recovery of insulin in patients by suppressing the body's auto-immune response.

To do that, scientists remove a small amount of the patient's bone marrow and use it to grow stem cells in the laboratory to activate immune-suppressing properties.

The activated cells are then infused back into the patient, converting aggressive cells to passive cells.

Dr Turner said a Chinese-American study, published earlier this year, proved stem cells could be used to help turn off aggressive auto-immune responses.

"The results were astonishing. After 12 weeks all treated patients were making their own insulin in larger amounts."

But Mrs Vallis said they needed further funding to make sure Kiwis could reap the rewards of that trial.

She's teamed up with the Waikato Chamber of Commerce and Hamilton Central Business Association to ask for donations to further fund the research.

Their research will go further than previous studies, by using activated cells with a second trial using stem cells to "condition" white blood cells before infusing them back into the body.

"With these developments a cure for type 1 diabetes and other immune-related disorders is within our grasp," Dr Turner said.

Mrs Vallis founded the Spinal Cord Society in 1988 after her husband Keith was paralysed in an accident. He died in 2004.

She wanted to aid research into spinal cord injury treatment with a focus on using bone marrow stem cells to promote nerve growth.

She received approval from the Multi Region Ethics Committee to conduct human clinical trials in April 2011.

"We are now at a stage where we wish to broaden our research work to capitalise on the overseas research that shows a very high likelihood of an eventual cure for type 1 diabetes.

"But clinical trials require larger amounts of money than running a laboratory so we are asking the public for help," Mrs Vallis said.

"We have the expertise; we have the facilities, now we just need the money."

The society needs about $800,000 for the first stage, to cover clinical screening and monitoring, test supplies, equipment, staff and supplies.

Donations can be made to the Spinal Cord Society of New Zealand at any New Zealand Westpac branch 03 0363 0273614 00.