They have linked a gene in mice the defect spina bifida and the hunt is now on to see if the equivalent human gene is altered in sufferers.
The discovery follows a 50-year search by doctors around the world for the gene, known as curly tail in mice, and could lead to new treatments, the Royal Melbourne Hospital said.
Spina bifida is one of the most common birth defects, occurring in one in 1,000 live births. The spinal cord fails to close in sufferers, causing paralysis of the lower limbs, bladder and bowel dysfunction.
The discovery was made as part of doctoral studies by Stephen Ting at the hospital's bone marrow research centre.
Spina bifida is one of the most common birth defects, occurring in one in 1000 live births
The findings were published on Monday in the medical journal Nature Medicine.
Ting's supervisor, Stephen Jane, said although the incidence of spina bifida has decreased due to use of folate supplements by women in early pregnancy, this did not appear to work with some children.
"Children are still born with this condition, which shows that some cases of spina bifida are resistant to folate treatment," Jane said. "Defects in the new gene cause spina bifida which is not preventable by folate. This now paves the way for future work into this type of spina bifida."
Studies of DNA from children with spina bifida are now being conducted to determine if the corresponding human gene is altered in these patients.
The discovery could also lead to other developments, the hospital said, as there is evidence that the mechanisms underlying the closure of the spinal cord also work in other biological processes such as healing of wounds.
"Lessons learnt from the spina bifida gene may therefore impact on conditions as diverse as trauma, skin ulcers and burns," said Jane.