It weighed about as much as a large parrot, was related to the fearsome Tyrannosaurus rex and boasted just one finger on each hand.

Although it might sound like the punchline to a joke, the Linhenykus monodactylus is an important new discovery, say experts: the first two-legged dinosaur with only one claw on each forelimb.

The species is part of the theropod group – which also included T rex and Velociraptor, and which ultimately gave rise to birds – said Professor Xu Xing, who led the international research team which found the northern Chinese specimen.

"Linhenykus was very small sized, similar to a [large] parrot. We think it lived on ants and other small insects. It might also have been the prey of other kinds of dinosaurs in the area," added Xu, of the Institute of Vertebrate Palaeontology and Paleoanthropology, at the Chinese Academy of Sciences.

Michael Pittman of University College London – another member of the team – told the BBC: "You'd see a very small animal, probably below your hip height, with a very small skull. It's not very threatening because its teeth are very small compared to other carnivorous dinosaurs."

Xu said the discovery showed that the evolution of theropods was more complex than originally thought. Some species had a big finger and two small ones. Experts had surmised that the creatures used the large one to dig with and that it became stronger over time while the smaller ones were not used and were eventually lost.

"But for Linhenykus, its big finger is not that strong, while the two other fingers have withered. So this is rather different from what we have always thought and is worth researching. It is far more complicated than we have believed," said Xu.

The partial skeleton includes vertebrae, a forelimb, part of a pelvis and nearly complete hind legs. It was found in rocks formed between 84m and 75m years ago in Inner Mongolia – close to Linhe, the city after which it is named.

"Linhe is the place where dinosaur fossils from the late Cretaceous period have been best preserved," said Xu.

"In the late Cretaceous, sandstorms killed many dinosaurs. We discovered the fossil of a group of ankylosaurs and dinosaurs that were sitting on their eggs.

"I think Linhe has got great potential and I am very optimistic about finding more there."

The researchers discuss their find in this month's edition of the journal Proceedings of the National Academy of Sciences.