A study of 13 Vietnamese patients infected with the H5N1 strain of bird flu found two developed a rapid resistance to the anti-viral drug Tamiflu.
The report published in the New England Journal of Medicine comes as the World Health Organisation confirmed a 39-year-old man and an eight-year-old boy died earlier this month of bird flu in Indonesia.
Governments around the world are stockpiling Tamiflu amid fears that bird flu will mutate into a form that is more easily spread between humans.
Britain's Department of Health is stockpiling 14.6 million courses of the drug, which it was hoped would shorten the length of illness and reduce the symptoms.
A DoH spokesperson said it would be "carefully considering" the research but at present "the experience is the drugs do work."
She added, however, that "people should not privately stockpile the drug as this risks increasing resistance."
Researchers at the Oxford University Clinical Research Unit working in Vietnam warned that other anti-viral drugs apart from Tamiflu may be needed. They fear that people taking the wrong dose of Tamiflu may contribute to the growth of a resistant virus strain.
Leading virologist Sir John Skehel, director of the National Institute for Medical Research in London, urged the government to broaden Britain's defence by looking at other options such as the inhaled drug Relenza.
In the Vietnamese study, a 13-year-old girl died eight days after starting treatment. Her condition initially improved when she received the Tamiflu dose, but gradually worsened. It was later found that the amount of virus in her throat had increased.
A second patient died after 14 days and they also showed signs of an increase in the amount of virus.
Commenting on the report in the journal, Professor Anne Moscona of Cornell University in New York, said Tamiflu-resistant H5N1 "is now a reality".
She said: "This frightening report should inspire us to devise pandemic strategies that do not favour the development of Tamiflu-resistant strains."