TORONTO - Cholesterol may not just be bad for your heart.

A study suggests problems with cholesterol regulation in the insulin-producing cells of the pancreas may be responsible for the development of Type 2 (formerly known as late onset) diabetes.

The work, by scientists at Vancouver's Child and Family Research Institute, was done in mice. And the researchers would have to show that the same mechanism is seen in people.

But if their theory is correct, it could open new avenues for the prevention and control of Type 2 diabetes, a condition the Canadian Diabetes Association estimates affects more than 1.8 million Canadians and rising.

"This is an important observation because it demonstrates a new potential mechanism by which in Type 2 diabetes the beta cells could be dysfunctional," said Dr. Bernard Zinman, a diabetes expert who was not involved in the study.

The article was published online Sunday by the journal Nature Medicine.

The Vancouver research started in the laboratory of Dr. Michael Hayden, director of the institute's centre for molecular medicine and therapeutics.

Hayden is an expert in the genes involved in cholesterol metabolism. That work led to the cloning of a gene called ABCA1 that was shown to play a key role in regulating the amount of cholesterol in the blood.

Hayden's lab has focused on cholesterol and its role in heart disease. But the thesis of one of his graduate students, Dr. Liam Brunham, raised the issue that cholesterol is found in the beta cells - the cells responsible for insulin production - of the pancreas.

"We were perplexed by that, because why is it even in the pancreas and why is it so highly expressed (produced)?" Hayden recalled in an interview.

They consulted Dr. Bruce Verchere, a beta cell expert who heads the institute's diabetes research program. The group decided to see what would happen if they genetically engineered mice to knock out the ABCA1 gene.

The answer was clear.

"The animals developed diabetes. And furthermore, the animals showed a ... very significant accumulation of cholesterol in the beta cells," Hayden said.

Verchere said all cells, including the beta cells, need some cholesterol, but levels need to be "tightly regulated."

"It has to be there in the right amounts," he said from Vancouver.

"If you can't regulate it and there's too much of it, it's almost like too much of a good thing. That's when the beta cell goes awry."

To the group's knowledge, this is the first paper questioning whether cholesterol dysfunction is responsible for the inability of the beta cells to properly secrete the insulin the body needs to metabolize foods. For Zinman too, it was a novel idea.

"Now whether it has any relationship to people is unclear of course. No one has described this kind of abnormality in people that I'm aware of," said Zinman, director of the Leadership Sinai Centre for Diabetes at Toronto's Mount Sinai Hospital.

He noted, though, that there are competing theories. One is that amylin, a hormone produced by the beta cells, builds up to excess amounts and knocks out the beta cells' ability to function properly.

Zinman suggested it is also possible that the over-production amylin and cholesterol may be the products of some yet unidentified problem that is behind the development of Type 2 diabetes.

Hayden said the group is pursuing other studies that should indicate by year's end whether the cholesterol regulation problems are seen in humans with Type 2 diabetes.