– Australian scientists hailed the country's most significant dinosaur discovery in decades on Friday after three new species were unearthed in a Queensland billabong.

The flesh-eating theropod -- dubbed Australia's answer to the "Jurassic Park" velociraptors -- and two sauropods had lain in a 98 million-year-old geological deposit until a recent archaeological dig.

Scientists said the three, named Banjo, Matilda and Clancy in honour of Australia's most famous song, "Waltzing Matilda", opened up an exciting new front in the world of dinosaur research.

"Wow! This is amazing stuff," said John Long, head of sciences at Museum Victoria.

"I would regard the paper by Scott Hocknull and his team as one of the most significant papers ever published on Australian dinosaurs to date."

Queensland Museum researcher Hocknull and his team found the fossils in the billabong, or small lake, near the Outback town of Winton, where poet Banjo Paterson is said to have written "Waltzing Matilda" in 1885.

The team used bulldozers to carve through the site's unyielding topsoil before digging with hand tools in the thick clay beneath, back-breaking work which yielded Australia's first major dinosaur discovery since 1981.

Hocknull compared the theropod, from the tyrannosaurus rex family, to the velociraptors made famous in 1993's "Jurassic Park", only "many times bigger and more terrifying".

"He could run down most prey with ease over open ground. His most distinguishing feature was three large slashing claws on each hand," Hucknull said.

"Unlike some theropods that have small arms, Banjo was different. His arms were a primary weapon. He?s Australia's answer to velociraptor but many times bigger and more terrifying.

The plant-eating Matilda and Clancy belong to the giant titanosaur family, the biggest creatures ever to walk the earth.

"These discoveries are a major breakthrough in the scientific understanding of prehistoric life in Australia," said state premier Anna Bligh, as she announced the find in Winton.

Scientists said Australia's continent-sized Outback could hold untold treasures for palaeontogists.

"When we think of dinosaurs we think North America, Europe, South America, Africa, not Australia," said Rod Wells, of Flinders University.

"Australia is the exciting new frontier in vertebrate palaeontology, a continent as large as North America awaiting exploration."

Hocknull also held out hope that more discoveries were waiting for his team near Winton.

"Many hundreds more fossils from this dig await preparation and there is much more material left to excavate," Hocknull said.