Olympics, a group of Australians took part in a medical trial to see what effects steroids have on the body.

As expected, many volunteers found they experienced the familiar side-effects of steroids - acne and bouts of ill-temper, known as 'roid rage. But when the study organisers looked more closely, they made a surprising discovery. Many members of the control group - who, unwittingly, had been taking a dummy pill instead of steroids - experienced the same unpleasant side-effects of anger and skin complaints.

What the mind expects, it often gets. This phenomenon is known as the "nocebo effect". Nocebo is placebo's evil twin.

With the placebo effect, the expectation that something will make us better means that it does. With the nocebo effect, the belief that something will make us ill actually does make us poorly.

For example, in a study in Naples, patients were given a dummy pill and asked to report whether it made them feel ill. Amazingly, 27% said they experienced side-effects such as itching, malaise and headaches. This was not a freak result. On average, 25% of patients who receive any medical treatment will experience unwarranted psychologically induced symptoms of pain or illness.

As a result of the nocebo effect, millions of pounds are spent on changing drug prescriptions every year.

It also undermines the healing process: patients recover from surgery more slowly if they go into an operation expecting there will be adverse side-effects. The rise in allergies and food intolerances is another example: an astonishing one in five of us now believes that eating wheat or dairy products makes us feel bloated.

This may all sound like hypochondria, but psychological illnesses are not to be underestimated. The symptoms that sufferers experience are real and often extremely unpleasant.

Treating illness like this has always been impossible, because the biology behind it has been elusive. But now Italian researchers believe they have discovered the source of the nocebo effect. Fabrizio Benedetti of the University of Turin has discovered a chemical in the brain that turns anxiety into pain.

By blocking the actions of this chemical - a neurotransmitter named cholecystokinin (CCK) - Benedetti's team found they could eliminate the harmful symptoms of nocebos.

The first clues came in 1997, when Benedetti found that patients recovering from painful surgery were not susceptible to the nocebo effect when given injections of proglumide, a drug that blocks the action of CCK. Now Benedetti and his colleagues have completed the picture by showing that CCK can turn anxiety into pain.

In the study, reported in the Journal of Neuroscience, Benedetti asked 49 volunteers to perform a painful task - squeezing a hand exerciser repeatedly and strenuously for 15 minutes. Volunteers given a nocebo reported higher pain than the control group. But volunteers who were given a nocebo plus proglumide experienced no more pain than the control.

When Benedetti studied blood samples taken during the experiment, he found that both groups who received nocebos showed elevated levels of the stress hormone cortisol in their blood. He concluded, therefore, that the proglumide had stopped stress taking effect.

The Italian team is now working with drug companies to produce CCK blockers that could be incorporated into pharmaceuticals.

But if the drugs don't work, there is an alternative approach. If the brain is so good at deceiving itself, why not harness that same power of deception to "trick" it into treating chronic pain? This is exactly the basis of several elaborate new pain therapies. Sufferers of phantom limb syndrome - where pain is experienced in a limb that has been lost - are treated by placing a mirror in front of the patient to make it appear they have two healthy limbs. Moving the phantom limb helps release the pain.

Meanwhile, at Stanford University in California, sufferers of incurable chronic pain are hooked up to special brain scanners allowing them to see what's going on in their brain's pain centres. Doctors find that, once the patient can "see" the source of the pain, they can learn to control it, by focusing on it or by imagining it disappearing.

After years of "self-inflicted" suffering, at long last we are beginning to learn how to outsmart ourselves.