University of Melbourne researchers have become the first in the world to show that brain scans can be used to predict how well young people will recover from early psychotic episodes that occur in mental illnesses such as schizophrenia.

Research leader Dr Stephen Wood said that until now no-one had been able to successfully use brain scanning to predict whether a patient's first psychotic episode was an isolated experience or the start of a lifelong illness.

A team from the University's Melbourne Neuropsychiatry Centre (MNC) and ORYGEN Research Centre has made the breakthrough.

Their research shows that levels of a certain chemical in the brain can predict how a young person experiencing their first psychotic episode is likely to be affected over the next few years.

The Melbourne scientists compared the brain scans of 46 psychiatric patients with their health records over two years.

They demonstrated that low levels of the brain chemical n-acetyl aspartate early in the course of a mental illness indicated that a young person was likely to develop chronic schizophrenia.

About one in 100 Australians has schizophrenia, while about three to four percent will experience a psychotic episode at some time in their life.

"Our findings have the potential to dramatically improve the early treatment of mentally ill patients,'' Dr Wood said.

"It will lead to better diagnosis, prognosis and ultimately better treatment for patients experiencing their first psychotic episode.

"The current dilemma for psychiatrists is that until now there has been no way of scanning the brain to provide the patient with any sort of idea of their likely recovery.

"Generally psychiatrists consider factors such as the age and gender of the patient but must take a wait and see approach.

"Diagnosis and prognosis are often made once the disease progresses, and then, retrospectively, the psychiatrist can see that some of the early indicators were in fact the start of a chronic condition.''

The Melbourne research used a technique known as MR spectroscopy - in which MRI scans are used to measure the concentration of chemicals in the brain - to measure the levels of n-acetyl aspartate in the frontal cortex, the brain region which controls higher-order thinking.

It found that all of those who went on to develop schizophrenia after their first psychotic episode had low levels of this chemical.

"This is the first time anyone has been able to combine the brain images and long term clinical data from the same group of patients to find a way of predicting outcomes for psychiatric patients,'' Dr Wood said.

"Armed with information from brain scans, psychiatrists would be able to personally tailor medical programs for patients and implement more aggressive treatments for patients at risk of a poor outcome.''

Dr Wood said researchers now hoped to further their research, investigating whether using brain supportive supplements such as fish oil, folate, B vitamins and lithium, could lead to better recovery for patients.

Dr Wood led the research team which also involved Professor Christos Pantelis and Dr Dennis Velakoulis, from the Melbourne Neuropsychiatry Centre, and Professor Patrick McGorry from the ORYGEN Research Centre.

Findings of the research are published this month in the international journal the Archives of General Psychiatry.