The discovery of the largest known feathered dinosaur was announced by scientists in China on Wednesday. Similar in size and shape to Tyrannosaurus rex, palaeontologists at the Chinese academy of sciences in Beijing have named the new species Yutyrannus huali, meaning "beautiful feathered tyrant". At nine metres long and weighing more than 1.4 tonnes, it is also the largest feathered animal ever discovered – either alive or extinct.

Local farmers found three specimens in a small quarry in the Liaoning province of north-east China. Palaeontologists estimate that they are 125m years old, dating from the early Cretaceous period, and they believe that, like Tyrannosaurus rex, the animals hunted in packs. The three were found alongside the remains of a sauropod dinosaur that the researchers think they may have been hunting when they died.

"Finding a large dinosaur is not very easy, especially a complete skeleton," said Professor Xu Xing of Beijing's institute of vertebrate palaeontology and palaeoanthropology and the lead author of the study, which is published in Nature. "To have a complete skeleton with all the beautiful feathers preserved is a big discovery." Feathered dinosaurs have been found in China before, but they have all been much smaller.

Palaeontologists are now puzzling over why such a large carnivorous animal that would have been too big to fly needed feathers. According to Xu, there are two main possibilities. The first is that they acted as a warm, insulating coat. Research has shown that dinosaurs in this period lived in a cooler environment than their later cousins.

The other possibility is that the feathers were designed to attract a mate. "We have noticed that primitive feathers in dinosaurs are relatively spaced out, so it's not really the ideal structure for insulation," said Xu. "A limited distribution is more likely to indicate a display function."

The scientists are now on the hunt for more specimens to test these theories. Yutyrannus huali is thought to have been a sociable creature, living in groups and hunting in packs. "They were gregarious animals," said Xu.

China has become well known for its dinosaur discoveries. "They probably have a claim to being the premier place for new dinosaurs coming out of the ground," said Dr Paul Barrett, dinosaur researcher at the Natural History Museum.

Barrett saw the dinosaur remains on a recent visit to China and described them as spectacular. "They are mainly two-dimensional, preserved on two great slabs with very clear evidence of feathers around the skeleton," he said.

Feathered dinosaurs have only been found in a small area of China, but Barrett believes the discovery confirms that feathers were common in dinosaur evolution. "This also raises the possibility that T rex itself may have been feathered, because this is a close animal to T rex and it's also much closer in body size," he said.

Previously scientists believed T-rex was too big to have feathers, as they would have caused it to overheat.

"What the discovery shows is that you can still be a pretty big meat-eater and still get away with having feathers," said Dr Barrett.

Xu is now attempting to reconstruct the colours of Yutyrannus huali's feathers. He is also planning an exhibition and hopes to bring one of the specimens to London later in the year.