Scientists are to decipher the genetic code of our closest relative, the barrel-chested, long-faced Neanderthal, in the hope that it will reveal how modern humans developed the formidable cognitive power to dominate the world.

With fragments of DNA from bones found in ancient caves, researchers will piece together the Neanderthal's genome, and compare it with those already sequenced for humans and chimpanzees.

Modern humans and Neanderthals split from a common ancestor nearly 500,000 years ago, as primitive humans first harnessed the power of fire. From a foothold north of the Mediterranean, Homo heidelbergensis steadily evolved into the Neanderthals, while in Africa, the same species embarked on a different evolutionary path, one that ultimately gave rise to Homo sapiens.

Remains of Neanderthals dating back as far as 400,000 years ago suggest a reasonably sophisticated species that crafted tools and weapons and buried its dead, but they were no match for Homo sapiens. The last Neanderthals died out nearly 40,000 years ago, as Homo sapiens migrated to, and eventually settled throughout, Europe.

The team of scientists, led by Svante Pääbo at the Max Planck Institute in Leipzig, will analyse strands of DNA preserved in a leg bone recovered from a cave in Vindija, Croatia, and an upper arm bone from an archaeological site in the Neander valley in Germany.

Contamination with microbes means only 5% of the DNA collected from the bones belongs to Neanderthals, giving the scientists an enormous sorting problem.

The effort to reconstruct the 3 billion building blocks of the genome is expected to take two years, using a rapid sequencing technique developed by a US-based company, 454 Life Sciences. The complete genome will be made publicly available for other researchers to study.

"If we're really interested in what makes us truly modern humans, we need to look at the genetic changes that have happened in the past 200,000 to 300,000 years, and to identify those changes we need to look at our closest relative, the Neanderthal," said Dr Pääbo.

While humans and chimps share 99% of their genetic code, the remaining 1% still amounts to around 35 million genetic tweaks that separate the species. The difference between modern humans and Neanderthals is much smaller, making it easier to pinpoint the genes that furnished us with distinguishing characteristics such as larger, complex brains and the ability to develop sophisticated language.

"The Neanderthal genome will tell us much more about human biology than sequencing any other individual around. The ultimate goal is to understand humans, with the real pot of gold for humanity being the genes associated with cognition. We want to know what are the handful of genetic changes that separated modern humans from the Neanderthal? The most amazing thing is that we've been able to find samples that had DNA and are now able to sequence it," said Michael Egholm, vice-president of molecular biology at 454 Life Sciences.