A miniature new drone is making a big splash with an innovative version of the flying machine able to soar through the air, land on water, then dive to the depths to zip along faster than a submarine.

The amphibious Loon Copter — developed and first tested in early 2015 by the Embedded Systems Research Laboratory at Oakland University in Michigan — could be a powerful war weapon. But researchers who created it envision its valuable peacetime missions, including use in environmental reconnaissance, examination of underwater structures, and in search and rescue operations.

Lead scientist Osamah Rawashdeh even believes the little drone could be a reliable shark deterrent. The third, latest version of the Loon Copter is a semifinalist in the UAE Drones for Good Award, a competition held in Dubai in early February.

Other underwater drones have been invented but so far no other matches the flexibility of the Loon Copter. When the drone lands on water a buoyancy "bladder" keeps it floating on the surface. But when the drone fills up the chamber with water, it sinks beneath the surface, tilts 90 degrees and uses its rotors to maneuver. The drone can resurface by ejecting the ballast water, which allows it to take off from the water's surface and go airborne again.

Scientists are now upgrading onboard electronics so the Loon Copter can stream live video back to operators. "We can have the vehicle dive at predefined GPS points to various depths to collect data or video footage" and transmit it live, Rawashdeh told Digital Trends.

If the project wins the February competition, the Loon Copter team will collect a $1m (£700,000) grand prize.

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