Scientists in the region have designed a microwave oven that can turn orange peel into precious chemical gold.

Scaling up the system could potentially unlock a treasure trove of compounds, materials and fuels from food residues and left-overs, it is claimed.

In the case of oranges, half the peel normally thrown away could be recycled for industry by the process.

The microwaves break down cellulose in the peelings into a wide range of useful products which can then be further refined.

Scientists have christened the project the Orange Peel Exploitation Company (Opec).

Lead researcher Professor James Clark, from the University of York, said the technology could be worth billions to the UK economy.

Speaking at the British Science Festival, taking place at the University of Bradford, he said: ''Waste orange peel is an excellent example of a wasted resource.

''In Brazil, the world's largest producer of orange juice, half the orange fruit is left as waste once the juice has been recovered.

''This corresponds to eight million tonnes a year of orange peel that can be used to produce chemicals, materials and fuels.''

So far, Prof Clark has built a £200,000 demonstration device, resembling a kitchen microwave, which can process small flasks of food waste.

But a bigger machine that can handle 30 kilograms of waste an hour will be unveiled at the University of York's new Biorenewables Development Centre in December.

On an industrial scale, a £1 million version of the oven could have a capacity of six tonnes of material an hour, said Prof Clark.

Products obtainable from orange peel include pectin - a thickening agent used by the food industry - porous carbons for use in water purifiers and insulation, bioethanol motor fuels, and chemicals that act as catalysts and solvents.

Other potentially valuable waste materials include wheat and barley cereal straws, cashew shells, pea pods, apple peels, rice husks and coffee grounds.

The processor operates at around 200C, cooler than a kitchen microwave.

At around this temperature, cellulose breaks down into chemically active sugars. Molecules of useful products can be ''stripped off'' and further refined by altering the temperature and processing time.

Prof Clark said in future, domestic food waste could be taken to microwave facilities at community recycling centres, or processing plants set up in shopping centres.

''Waste is a problem worldwide,'' he said.

''Food residues and by-products are being generated in significant quantities by the food industry and the agricultural sector,'' he added.

''Though they are sometimes used in low-value applications, they are often landfilled, which is economically and socially unacceptable as well as representing a major loss of resource.''