Scientists have announced the discovery of a crow-sized, bird-like dinosaur with colourful feathers from north-eastern China that lived 161 million years ago during the Jurassic period.

They named it Caihong, the Mandarin word for rainbow.

Microscopic structures in the exquisitely preserved, nearly complete fossil unearthed in Hebei Province indicated that it boasted iridescent feathers, particularly on its head, neck and chest, with colours that shimmered and shifted in the light, like those of hummingbirds.

The discovery "suggests a more colourful Jurassic world than we previously imagined," said evolutionary biologist Chad Eliason, of the Field Museum in Chicago, one of the researchers in the study published in the journal Nature Communications.

Using powerful microscopes, the scientists detected within the feathers the remnants of organelles called melanosomes responsible for pigmentation.

Their shape determines the colour. Caihong's feathers had pancake-shaped melanosomes similar to those of hummingbirds with iridescent feathers.

Much of its body had dark feathers, but ribbon-like iridescent feathers covered its head and neck.

While it possessed many bird-like characteristics, the researchers doubted it could actually get airborne.

Its plumage could have attracted mates while also providing insulation.

Caihong was a two-legged predator with a Velociraptor-like skull and sharp teeth, probably hunting small mammals and lizards.

It had crests above its eyes that looked like bony eyebrows.

Caihong had fuzzy feathers and pennaceous ones, those that look like writing quills.

It is the earliest-known creature with asymmetrical feathers, a trait used by birds to steer when flying.

Caihong's were on its tail, suggesting tail feathers, not arm feathers, were first utilised for aerodynamic locomotion.

"It is extremely similar to some early birds such as Archaeopteryx," palaeontologist Xing Xu of the Chinese Academy of Sciences said, referring to the earliest-known bird, which lived 150 million years ago.

"Its forelimbs were configured like wings. To be honest, I am not sure what function the feathers have, and I don't think that you can completely exclude the possibility that the feathers helped the animal to get in the air."

The dinosaur's full scientific name, Caihong juji, means "rainbow with a big crest".