Two years ago in a West Yorkshire laboratory, Stephen Burkinshaw made a discovery that could change the way we wash our clothes.

Burkinshaw, a chemistry professor at Leeds University, has spent 30 years researching textiles and finding better ways of making dyes stick to them. His eureka moment came when he realised that stains and dyes had similar properties. If he could stick dyes onto fabric then it should be possible to reverse the process and use fabrics to remove stains, he thought.

Burkinshaw’s insight led to the invention of the first nearly waterless washing machine, which uses plastic beads instead of water to remove dirt. It also consumes a fraction of the energy needed by a conventional machine.

After three years’ work, Burkinshaw and his colleagues developed technology that cleaned a full load of washing with just one cup of water and left the clothes almost dry.

The professor said the tests had produced “quite astonishing” results, including the removal of stains such as coffee and lipstick “using a fraction of the water used by conventional machines”.

Xeros, a spin-off company from the university, is now trying to commercialise the technology with some of the biggest names in the washing and dry-cleaning industry.

Last year it received about £450,000 of funding from IP Group, which backs university projects it believes will become profitable. Revolymer, the creator of nonstick chewing gum, is another firm it has invested in.

Initially, Xeros is targeting North America. Rather than taking on established players, the company aims to sell the technology to manufacturers to use in their machines.

“We are aiming to stimulate evolution, rather than create a revolution,” said Bill Westwater, Xeros’s chief executive.

He said the company was not trying to “do a Dyson” (the vacuum cleaner entrepreneur who went head-to-head with Hoover and other big manufacturers in the 1980s) and take on the big players.

“We see ourselves more like ‘Intel-Inside’ [the Intel ad campaign that convinced computer manufacturers to use Intel components] because we are looking to partner with the established players. That way people will trust us more.”

Experts say the laundry market is ripe for green technology. Matt Pertl, president of Pertl & Alexander, an American laundry consultancy, said: “There is a big movement towards this sort of thing. The industry is a huge consumer of natural resources and the science of laundering has not changed in eons, so if there is technology that advances the process then there would be a very eager and receptive audience.”

Xeros’s Westwater said: “The short-term aim is the commercial market. We are also developing a 20kg wash machine for the ‘on-premise laundry’ such as hotels, hospitals and nursing homes.”

The company also has its eye on the consumer. “Eventually, we want to downscale and develop a machine small enough to fit into the home – that market could be huge.”

Waterwise, a pressure group that wants to see Britain’s water consumption fall by 2010, said the use of washing machines had risen 23% in the past 15 years. The average UK household uses almost 21 litres (37 pints) of water daily on clothes washing, 13% of total consumption.

The Xeros technology is still at the prototype stage but tests have shown that it uses 90% less water and 30% less energy than conventional machines. Clothes remain nearly dry, making tumble drying unnecessary.

The technology works by replacing most of the water with thousands of tiny, reusable nylon beads that attract and absorb dirt under humid conditions.

A cup of water and detergent dampens the clothes and loosens the stains and the water vapour enables the beads to work. When the cycle has been completed, the beads pass through to an outer drum and can be used up to 100 times – the equivalent of about six months of washing.

Westwater and his team have been demonstrating a working machine in America and have a deal with Green Earth Cleaning, an environmentally friendly dry-cleaning business, to sell the technology across North America.

The company has just raised a further £920,000 from IP Group and Enterprise Ventures, as well as £250,000 from the Yorkshire Development Agency to help fund further research and eventually target the domestic market.

“The ultimate goal is to have a machine in every household, which would have an environmental impact comparable to taking 2m cars off the road,” said Westwater.

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