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It is the phone you can customise for any use - swapping cameras, speakers and even health sensors as you need them.

Google has shown off the first working version of a 'modular' smartphone it hopes could go on sale early next year.

Called Project Ara, it was unveiled at Google's I/O developer conference in San Francisco.

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The back of the Ara handset allows modules to be quickly removed and replaced. Speakers, cameras, lights, batteries and fitness sensors can all be put on the phone when needed - then simply removed.

Paul Eremenko, the head of Project Ara, said that the prototype was 'tethered to a laboratory bench' a few weeks ago, but the team has since removed that tether to test the phone's features.

He said one of the key challenges was to design the phone to be attractive to consumers.

'The design must overcome the connotations of boxiness and brick-like that people associate with modularity,' he said.

Google is working with New Deal Design on the project.

It also announced a $100,000 project to design modules for the handset.

When Eremenko brought the prototype on stage during a breakout session of Google I/O at San Francisco's Moscone Center and flashed the Android bootup screen, the audience cheered - although the phone failed to boot fully.

The Project Ara 'Grey Phone' will consist of a simple frame, screen, Wi-Fi connection and processor with users able to customise it with various plug-in modules, colours and accessories.

Paul Eremenko, Google's Project Ara head, revealed the date to attendees at the company's developer conference this week and has outlined further plans for the device.

The prototype handset, which Google showed off for the first time this week - although it failed to load fully.

Google's much-anticipated modular smartphone could be available in January 2015 for as little as $50 (£30)

'It's called the Grey Phone because it's meant to be drab grey to get people to customise it,' Mr Eremenko said.

The phones will be able run on multiple batteries - when one battery dies, it can be detached and replaced with a full battery module.

Lower-resolution cameras can be swapped with higher-res versions, and users will be also be able to 3D print replacement parts.

One of the proposed final designs for the project. Each module clips in and out depending on what feature the user wants.

Google's kit describes various modules including batteries, Wi-Fi and Bluetooth chips, cameras, speakers and more. In theory, any sensor that can be fitted to a module will work on Ara handsets, pictured

Each phone will have a central 'spine' and an endoskeleton that individual modules will clip on to. There will be three different sized endos - mini, medium and large, pictured

By printing their own parts, users will also be able to customise them.

Google has revealed each phone will have a central 'spine' and an endoskeleton - nicknamed 'endo' - made of ribs that the individual modules will clip on to.

There will be three different sized endos - including mini, medium and large - to rival the existing range of phones currently on the market, from compacts to phablets.

Larger Grey Phones will be able to accommodate more modules than the mini will, for example.

Google's kit describes various modules including batteries, Wi-Fi and Bluetooth chips, cameras, speakers and more.

In theory, any sensor that can be fitted to a module will be able to attach to a device, and while Google will make the shell, these modules will be made by other companies.

At the developer conference, Google outlined a time frame for development for the modular device, attempting to attract hardware and software developers.

The main frame of the Grey Phone will be built to last around five to six years, according to Mr Eremenko, allowing users to upgrade their phones regularly.

He added that the basic framework can be used to build any number of devices, beyond a simple smartphone.

'If it can be other things, we encourage that,' Mr Eremenko said but added that Google intends Ara to be 'ultimately a great smartphone first and foremost'.

Project Ara was developed as a result of Google's purchase of Motorola and its Advanced Technology and Projects group.

It is based on the Phonebloks designs by Dutch inventor Dave Hakkens.

It was initially assigned to Motorola, and had been planned to add to the firm's existing range, but Google sold the phone maker to Lenovo in January.