It was one of the world's first predators: an ancient beast that patrolled the oceans half a billion years ago in search of prey to grasp with its long, spiny appendages.

But as fearsome as the creature was, fresh evidence has revealed that the giant shrimp-like animal was not so impressive in all departments. An extraordinary new fossil suggests its brain was simpler than some of its prey, and no more complex than tiny velvet worms that live in the leaf litter of jungles in the southern hemisphere today.

Researchers unearthed the fossilised remains of the animal that dated back to the Lower Cambrian, 520 million years ago, at a site in Yunnan in south-west China. The animal was identified as a new member of a group of animals called the anomalocaridids, meaning "abnormal shrimps."

The new species, named Lyrarapax unguispinus - Latin for "spiny-clawed lyre-shaped predator" - was so well-preserved that researchers could trace out the basic structure of its brain for the first time. Like velvet worms, which have stubby legs that end in a pair of claws, Lyrarapax had a simple brain in front of its mouth and two bundles of nerve cells at the front of its optic nerve and at the base of the long appendages that it used to capture prey. No other modern animal shares the same brain structure.

"The top predator of the Cambrian had a brain that was much less complex than that of some of its possible prey and that looked surprisingly similar to a modern group of rather modest worm-like animals," said Nicholas Strausfeld, director of the University of Arizona's centre for insect science. Details of the fossil are reported in the journal, Nature.

At just over 12cm long, Lyrarapax was much smaller than the largest anomalocaridids, some of which reached more than a metre long. The fossil suggests that modern day velvet worms and other arthropods retained aspects of their ancestors' brains as they evolved.