Under the new system a tumour under the size of a pea would be left and monitored every three to four years.
The team are hoping that screening will be brought in for men over 55 in the same way that women are routinely screened for breast and cervical cancers. They believe it could save thousands of lives each year.
The test was devised by Professor Richard Morgan, of the University of Bradford, and Professor Hardev Pandha, of the University of Surrey.
Speaking at the British Science Festival in Bradford, Prof Morgan said: "The thing about prostate cancer is that it is not absolutely necessary to detect it at its earliest stages, when treatment is not needed.
"The problem with the current tests is it cannot distinguish between a small tumour that won't cause much harm and something more serious. So men have needless treatment.
"With this test we can avoid biopsies and only treat when it is absolutely necessary."
Prof Morgan added: "The EN2 protein is usually silent in normal cells but is present in increasing amounts as tumours grow.
"So it not only gives a marker for prostate cancer but we can screen for men who are most at risk."
The current blood test used by doctors to check for prostate cancer measures levels of protein called prostate specific antigen, or PSA, but it is wrong more often than it is right.
In trials of 77,000 men over five years the new test detected about 90 per cent of prostate cancers, making it more than twice as accurate as the PSA test.
The test is being developed by Randox Laboratories and will need to be approved by regulators before it could be used in the NHS.