In an incredible new revelation shedding important light on the history of animal evolution, a finger-sized fossil from 308 million years ago was discovered in the United States that gives clues of and hints at the presence of tiny dinosaur-like creatures that may be the forerunners of reptiles, researchers said Wednesday. 

According to the study, the new species is a microsaur -- a small, lizard-like animal that roamed the Earth well before dinosaurs, as we know them today, made their appearance -- scientists wrote in the journal Royal Society Open Science.

The find opens up a whole new chapter about the evolution of different animal groups, including amphibians and reptiles.

Microsaurs lived during the Carboniferous period, when the forebears of modern mammals and reptiles, called amniotes, first appeared.

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"Many details of that transition aren't well known," study co-author Arjan Mann, a post-doctoral research fellow at the Smithsonian Institution, told AFP.

"Microsaurs have recently become important in understanding the origins of amniotes," he said. "A lot of these microsaurs have been thought to be either ancestor of amphibians or ancestor of reptiles."

The serpent-like body of the animal, which was discovered in a swamp in what is now central United States, measures around five centimetres (two inches).

Four small, chubby legs protruded from the creatures' bodies.

Owing to its tiny size, researchers dubbed the new species Joermungandr bolti after a giant sea serpent from Norse mythology who did battle with Thor.

Scientists were astonished to discover the fossil also contained the animal's skin.

"Areas of the skin had only been known from fragmentary fossils before," said Mann.

"This microsaur is the whole shebang... that's very rare for these fossils. It's very rare for anything 300 million years old to have skin with it!"

The scientists discovered that the microsaurs, which had been earlier classified as amphibians, had scales.

"Modern amphibians... are soft and slimy things, this was not a soft and slimy thing," says Mann.

"This animal really had a reptile-like look to it."

Mann said the research suggests not only that microsaurs might be early relatives of reptiles, but also that the ability to burrow may have played a bigger role in the origin of amniotes than originally thought.

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The researchers used a highly sensitive imaging technique called scanning electron microscopy (SEM) to get an up-close look at the nearly perfect fossil.

They discovered a pattern of ridges similar to those found on the scales of modern reptiles that dig into the ground.

Along with other features like a robust skull and elongated body, the scale shape led researchers to hypothesise that Joermungandr burrowed as well.

"It would probably have been a head-first burrower, using its head to smack itself into the soil," said Mann.

"Its limbs were probably not very functional. It may have used them to stabilise itself as it was wobbling around. But its primary mode of movement would have been side winding like a snake."