Professor Nicholson and her colleagues have shown that one of the critical changes after spinal cord injury is an increase in the number of chemical communication channels - called "gap junctions" - between nerve cells.
The gap junctions play an important role in spreading damage from an injury site to other areas.
The researchers found that higher concentrations of the protein, called mimetic peptide 5, prevented cells from opening communication channels and disconnected existing gap junctions.
"This study supports the idea that regulation of Connexin 43 hemi-channel opening using mimetic peptides may be a useful treatment for reducing the spread of damage after spinal cord injury," they wrote in the United States journal Cell Communication and Adhesion.
Professor Nicholson said: "Our next goal is to investigate ways of targeted delivery."
The aim is to give an injection into the bloodstream - but this will depend on the outcome of research on how long the peptide lasts in the blood.
Professor Nicholson said there was some evidence the peptide would reach a spinal cord injury site if put into the bloodstream.
"We may have a natural delivery system that allows for targeted delivery.
"We need to be sure the peptide is stable for long enough." However it could still take a number of years for the team's discoveries to be translated into an established treatment.
Professor Nicholson is part of the new Spinal Cord Injury Research Unit, which was opened on Friday within the university's Centre for Brain Research.
To walk again is the big goal
Fishing, boating and camping are in Guy Irwin's DNA, but a single catastrophic moment in the Queensland surf robbed him of his Kiwi outdoors lifestyle.
His neck broke when a wave tumbled him and drove his head into a sandbar at Broadbeach in Surfers Paradise. The body-surfing accident in February 2006 instantly paralysed his arms and legs, and he might have drowned if not for the quick work of two trainee lifeguards who pulled him from the water.
"I was fully conscious but aware that I couldn't move," the 48-year-old from Rotorua recalled yesterday.
Mr Irwin and his wife, Susanne, the parents of an 11-year-old girl and a 12-year-old boy, own a Robert Harris cafe franchise in Tauranga. Mrs Irwin runs the cafe and Mr Irwin helps with the administration.
Tetraplegic since the accident, Mr Irwin says the life changes in going from being part of an outdoorsy family to being suddenly restricted to a wheelchair are indescribable.
He is thankful for the "fantastic" rehabilitation and treatment he has received, including tendon transfer surgery which has restored some movement to his shoulders, arms and hands, enabling him to write, hold cutlery, use a computer and drive. But he wants to walk.
"The current [therapies] help you to hold a pen and a knife and fork and drive a car. The new research they are working on at the Spinal Cord Research Unit will enable you to walk a walking track, pitch a tent, get in and out of a boat. For people in wheelchairs, that sort of difference is incredibly significant."