China's leading scientific institute has set up a special team to study bird flu, with one aim to develop genetically modified chickens that are resistant to the virus, according to a Beijing Youth Daily report.

The bio-physics department of the Chinese Academy of Science has set up the inter-departmental group to study the virus, develop vaccines and antibiotics, and accumulate technical knowledge, the newspaper reported on Monday.

"We will set up a small group of experts on genetically engineered chicken to research the effects of the bird flu on the GM chicken," Tang Hong, a lead researcher in the project, was quoted as saying.

Chinese scientists have already used a technique called ribonucleic acid (RNA) interference in which small fragments of the genetic signalling chemical were found to disrupt replication of the flu virus in mice, the report said.

Such experiments would become the basis for studies involving the genetic modification of chickens, it said.

Research is expected to take "years" but could yield sensational results and, if successful, scientists could control the spread of the virus in poultry, according to the report.

The new research group would also hunt for a bird flu vaccine and antibiotics to treat the disease, it said.

"The bird flu virus has all along been changing, so this will make research into a vaccine very complicated," Tang said.

China is already trying to increase rice harvests by growing genitically engineered rice, despite widespread concerns from environmentalists and consumer rights group over the safety of such foods.