Exquisitely preserved bones and feathers from the tip of a dinosaur tail have been discovered in a piece of 99-million-year-old amber, found by a palaeontologist hunting for fossils in a Myanmar market.

Key points: Piece of dinosaur tail found preserved in 99-million-year-old amber.

Piece of dinosaur tail found preserved in 99-million-year-old amber. First time dinosaur skeleton material found in amber.

First time dinosaur skeleton material found in amber. It is hoped the find will help scientists understand development of feathers in dinosaurs and birds.

The "astonishing" fossil contains the first skeletal remains of a dinosaur ever found preserved in amber, according to an international team of scientists writing in the journal Current Biology.

Spotted at the amber market last year by palaeontologist Dr Lida Xing, the tail fragment is believed to have belonged to a young dinosaur about the size of a sparrow that lived in the mid-Cretaceous period.

The amber was originally assumed to contain some sort of plant material and was destined to become jewellery, but Dr Xing of the China University of Beijing realised its scientific significance.

His colleague Dr Ryan McKellar, a co-author of the research paper, said it was fortunate that Dr Xing was on the scene.

"It's one of those things where if there hadn't been the right person on the ground at the time, I think it would have disappeared into a private collection or gone entirely unnoticed," said Dr McKellar of the Royal Saskatchewan Museum in Canada.

Stunning 3D detail

Analysis of the feathers reveals there is no strong central shaft, giving weight to the idea feathers developed barbules and barbs first. ( Supplied: Royal Saskatchewan Museum (RSM/R.C. McKellar) )

Close inspection of the fossil with a microscope and CT scanning revealed stunning 3D detail of feathers sprouting from either side of a central rod.

Preserved traces of pigmentation reveal the top of the feathers were a light chestnut brown, while the underside is pale and white in colour.

Hidden in among the feathers of the tail, which was about 3.5 centimetres long, were eight to nine tiny vertebrae.

The fossil also contains remnants of soft tissue and muscles. Analysis of this tissue revealed molecules of iron, which may indicate traces of haemoglobin or protein trapped in the fossil.

Working with the piece was a once-in-a-lifetime project, Dr McKellar said.

"It's about as close as anyone's ever going to get to petting a dinosaur," he said.

"It's visually stunning and the level of detail on the specimen is not something I was expecting at all.

"I've done a lot of work on amber from dinosaur bone digs in places like Alberta and Saskatchewan, and there's always the hope that maybe you'll find a fragment of a feather.

"This actually has part of the animal in it in terms of the skeletal remains too. It's a totally different ball game."

Fossil is a dinosaur not a bird

An artist's impression of a coelurosaur, a small feathered dinosaur related to modern birds. ( Supplied: Chung-tat Cheung )

The team believes that the wispy-tailed, juvenile dinosaur was a theropod: part of a group of largely carnivorous animals that included creatures like Tyrannosaurus rex and the ancestors of modern birds.

"We can tell it was a dinosaur as opposed to a bird because the bones within the tail aren't fused together into a rod like we see in modern birds," Dr McKellar said.

"It shows more similarity to dinosaurs like the velociraptor and tyrannosaurus than it does modern birds."

The specimen could help scientists better understand how feathers developed as dinosaurs evolved into birds.

"What gets me excited about this thing — as a feather and amber person — is that the feathers themselves are in an intermediate form," he said.

Modern bird feathers have barbs that come off a central shaft.

"This particular specimen doesn't have a very well developed central shaft and it points to a particular pathway for development of feathers in dinosaurs leading to birds," Dr McKellar said.

This indicates that feathers developed barbules and barbs before developing a central shaft — not the other way around as some have suggested.

'Most important specimen to date'

UV light revealed a single resin flow had encased the fossil. ( Supplied: Royal Saskatchewan Museum (RSM/R.C. McKellar) )

Dr McKellar said the find pointed to a rich future for the use of amber fossils in supplementing the information provided by bone fossils.

Amber fossils are valuable because they retain details and organic material, like the feather and bone structure of the Myanmar tail, that is typically lost in compression fossils.

"It's the most important specimen to date, because it's one of the few specimens in amber where we can say for sure, we're dealing with a particular group of animals, we can narrow it down," Dr McKellar said.

"In the past we've had Canadian amber specimens where the feather shape suggests you're dealing with something that might've been dinosaurian. But there's an underlying uncertainty.

"In this case you've got a concrete example that ties it all together."