The organism could help end global plastic pollution and protect other plants from climate change, experts have said.
The first State of the World’s Fungi study and a report from the Royal Botanic Gardens, in Kew, London, have shed light on many of the beneficial qualities of fungi.
The research estimates there are about three million species of fungi but said little is known about this “Jekyll and Hyde” growth.
The report claims fungi, including rusts, fungi penicillin and lichen, can help tackle all sorts of environmental challenges.
One type of fungus, found in a rubbish tip in Pakistan, is capable of breaking down plastics in weeks rather than hundreds of years, raising hopes of new ways to tackle global plastic pollution.
Fungi in plants, which can break down molecules directly into chemicals with similar properties to diesel, could make biofuels more economical, the study adds.
There is also a fungus that can grow in extremely acidic conditions and tolerate high levels of gamma radiation, which could help clean up sites contaminated by radioactive waste.
Certain fungi could also help plants alleviate some of the effects of climate change, such as drought and increased flooding, thanks to their unusual qualities, the report said.
Professor Kathy Willis, director of science at Kew, said: “The potential of fungi to address critical problems we have is very strong.
“This is an incredibly diverse, yet hidden kingdom. Our knowledge of fungi is so small. They are the Jekyll and Hyde.
“And yet in terms of addressing global challenges going forward, fungi may well hold many of the answers.”
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