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The Bill and Melinda Gates foundation set up a competition called 'Reinvent the Toilet Challenge' asking universities to develop innovative ways to manage human waste. 

The challenge, announced last year, was to design toilets that could capture and process human waste without piped water, sewer or electrical connections. 

The awards recognise researchers for developing toilets that deliver sustainable sanitation for an estimated 2.5bn people worldwide. 

Bill Gates announced the winners yesterday at his foundation's headquarters in Seattle. 

California Institute of Technology in the US which came first for designing a solar-powered toilet that generates hydrogen and electricity and to the University of Toronto in Canada for developing a toilet that sanitizes faeces and urine while recovering resources and clean water.

They are part of a Bill & Melinda Gates Foundation competition to reinvent the toilet for the 2.5 billion people around the world who don't have access to modern sanitation.

Scientists from around the world have taken up the challenge, and the foundation announced some projects Tuesday that will be getting more money to take their ideas from the lab to cities.

 "We couldn't be happier with the response that we've gotten," Bill Gates said.

To pass the foundation's threshold for the world's next toilet, it must operate without running water, electricity or a septic system, not discharge pollutants, preferably capture energy or other resources, and operate at a cost of 5 cents a day.

The United Nations estimates disease caused by unsafe sanitation results in about half the hospitalizations in the developing world. About 1.5 million children die each year from diarrheal disease.

According to the foundation, food and water tainted with faecal matter result in 1.5m child deaths a year and most of these deaths could be prevented with proper sanitation, hygiene and safe drinking water. 

Mr Gates said: "Innovative solutions change people's lives for the better. If we apply creative thinking to everyday challenges, such as dealing with human waste, we can fix some of the world's toughest problems. 

"All the participants are united by a common desire to create a better world - a world where no child dies needlessly from a lack of safe sanitation and where all people can live healthy, dignified lives." 

Cranfield University in the UK has secured an $800,000 grant for the next round of the competition. 

Cranfield University's funding - part of $3.4m grant pool from the Gates foundation - is to develop its concept of the 'Nano Membrane Toilet' which it claims will be able to treat human waste on-site without external energy or water. 

The concept works by extracting water from human waste through membranes as a vapour using a mechanism powered by the user. The resulting sludge moves downwards under gravity and is encapsulated in briquette form, with the potential for reuse in combusting or as land fertiliser. The water vapour is then condensed and can be used for washing or irrigation. 

The university point out that the technology could also be utilised in wealthy countries as clean, safe water becomes an increasingly precious resource.