THEY are touted as the next big thing in niche pets – hand-reared squirrels being sold in Sydney pet shops for more than $1200.

They are also regarded by the federal government as an "extreme threat" to Australia.

Pest potential ... a male squirrel for sale for $1200 in a Broadway pet store. Credit:Jon Reid

"That's just someone behind a desk, mate," said Chris Hibbard, who runs a squirrel-breeding farm in western Sydney. "There's never been any study done that says they will become a pest. That's just the government saying scientifically they're related to a rat and we have rat and mice problems. I cannot see how any animal who produces one or three animals in a nest could become a problem."

Squirrels may be kept as pets in NSW as long as they are desexed and microchipped.