A three-year-old boy has developed leukaemia as a result of gene therapy, Great Ormond Street children's hospital in London said yesterday.

The boy, who was born without an immune system, was given gene therapy as a baby to save his life.

Children with X-linked severe combined immunodeficiency, a rare condition that affects only males and is sometimes referred to as "baby in the bubble syndrome", die within their first year without treatment.

The unidentified child is the first in the UK, but the fifth in Europe, to get leukaemia as a result of the treatment. Four out of 11 boys on similar gene therapy in Paris developed the disease and one died.

Doctors at Great Ormond Street knew of the risk of leukaemia when the boy started their gene therapy trial in 2005. But Professor Bobby Gaspar, a consultant immunologist working on the programme, said the benefits for such children outweighed the risks. The only other option is a bone marrow transplant, and unless a relative is a perfect match, they have to undergo chemotherapy, which kills up to 20% of such babies.

Gaspar said: "We knew that this would be a possible side-effect ... We have been very careful in counselling our families before they enter the programme. These risks had to be balanced against the risks of conventional treatment which contain significant hazards."

The doctors believe a vector - a modified virus introduced to the bone marrow cells to deliver a working copy of the defective gene - is the cause of the problem. They are unable to control where it ends up, and believe that if it lands next to an oncogene (a cancer gene) it can switch it on, causing cancer. They are planning another trial using a vector that has been modified so that even if it lands next to an oncogene it will not switch it on.

Professor Martin Gore, chairman of the Gene Therapy Advisory Committee, said he had sympathy for the child and his family, and for the nurses, doctors and researchers at Great Ormond Street, who were "utterly dedicated" to helping children with life-threatening diseases.