Don't cry over spilt milk -- it could become a skirt‎

(CNN) -- Every year, millions of tons of milk deemed unsafe for human consumption are discarded in Europe. Now, a German company is turning the spilled milk into high-end fashion.

Anke Domaske, a biochemist turned fashion designer, is the inventor of QMilch -- a fabric made entirely of milk.

"Milk fabric has been around since the 1930s, but the process involved chemicals. QMilch doesn't, and it uses up fewer resources than natural fibers do," said Domaske, whose fashion label Mademoiselle Chi Chi is a favorite with stars including Mischa Barton and Ashlee Simpson.

The fabric is created from milk which is allowed to ferment before it is turned into a powder. It is then heated and mixed with other natural ingredients and turned into yarn.

"To make one kilo of cotton takes 20,000 liters of water...our process only uses two liters of water," said the 29-year-old entrepreneur, who hopes her environmentally friendly fabric will revolutionize the fashion industry.

The fabric might use less water than cotton but it is far more expensive to produce -- QMilch costs around $30 per kilo to produce, compared to $3.8 per kilo for cotton yarn.

QMilch has a similar feel to silk, and is marketed as a luxury fiber. But, unlike other labor intensive materials like silk -- whose commodity prices fluctuate depending on the markets and the weather -- the cost of QMilch is expected to be stable, which Domaske said is feeding into its popularity.

"We are just ordering machines for producing 1,000 tons per year," she said. "It is scaling up from producing two kilos per hour to 120 kilos per hour," she added.

The fabric, which Domaske said is non-allergenic, is attracting interest outside of fashion. Makers of hospital and hotel bedding, and even car upholstery firms, are keen to clad their products in the sustainable fabric formerly known as milk.