The endangered species was discovered on a tree plantation in North Yorkshire.
Julia Bailey from the UK Squirrel Accord, who discovered the colony, said she first found four red squirrels in the North Yorkshire sitka spruce plantation after using thermal imaging cameras.
Two cameras were then placed in the area, and the colony were later found to have moved in permanently.
The red squirrels had never been seen in the plantation before which is located in the western part of the North Yorkshire Dales, but Ms Bailey now believes the colony will prosper and increase.
The landowners have given permission for the survey to be extended across the plantation and to keep an eye on the colony.
Project Officer Ms Bailey told the BBC: “The plantation owners gave permission to survey a specific area using thermal imaging technology that picks up body heat.
“I found four individual red squirrels. I then placed two cameras in the area and was able to confirm a new colony of red squirrels.
“The plantation owners were delighted.”
A brand new volunteer group has been set up as part of a pilot project to protect the red squirrels called The Yorkshire Dales Red Squirrel Alliance.
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Rebecca Isted, Forestry Commission Squirrel Policy Advisor, told the BBC: “Our native red squirrels are an important part of our natural heritage and the discovery of a new population in North Yorkshire is a positive step in our shared aim to protect, identify and strengthen populations across England.
“Red squirrels are endangered and we estimate there are fewer than 40,000 left in England.”
The organisation was “committed to supporting the survival and recovery of our native species in woodlands across the country,” she said.
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Featured image – Unsplash