The scientists found the first skeleton in September 2003 in Liang Bua, a large limestone cave on the island. The one-metre-tall female, aged about 30 and dubbed "Hobbit", lived about 18,000 years ago.

Six similar skeletons were later found, some of whom lived in the cave just 13,000 years ago. The scientists have speculated that the species may have lived on Flores - which they dubbed the "lost world" - until the 16th century.

Despite having a small brain, the species could cook, hunt large prey and build rafts, the scientists say. Stone artefacts and animal remains were found with the skeletons.

Professor Roberts said the discovery would redraw the human family tree. "It's one of the most important (discoveries) because it shows there was diversity among humans until very, very recently. If you go with the previous models, people say for the past 30,000 years we've been the only human species to inhabit the planet, whereas in fact that's rubbish.

"For most of human history, there's been more than one human species. Right now, it's unusual for us to be the only one around. In actual fact, that's been the case even more recently than we ever believed possible."

"They've got a brain the size of a grapefruit, yet they can make stone tools just as well as we can make them . . . they were cooking, they were making fire and they were hunting those little stegodons, those little baby elephants . . . they were intelligent and almost certainly had language."

"There are lots of local folk tales in Flores about these people which are consistent and incredibly detailed. The stories suggest there may have been a grain of truth to the idea they were still living on Flores up until the Dutch arrived in the 1500s," Professor Roberts said. "The stories suggest they lived in caves. The villagers would leave gourds with food out for them to eat, but legend has it they were the guests from hell - they'd eat everything, including the gourds."

He said isolated Flores was a fascinating "lost world", home to a range of exotic creatures extinct elsewhere, often morphed into giant or dwarf forms through lack of genetic diversity. These included a dwarf form of the primitive elephant stegodon, giant rats, Komodo dragons, and even larger species of giant lizard.

The scientists say Homo floresiensis is descended from Homo erectus, who first arrived on Flores about 840,000 years ago, after leaving Africa about a million years ago.

However, Colin Groves, of the Australian National University, said the skeletons had some extremely primitive features, and could be related to an even earlier human ancestor, Australopithecus, which predated all Homo species and was thought not to have left Africa.