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Non-destructive diagnosis of power transformer condition is an increasingly important area of research. Power transformer coils are typically insulated with Kraft paper and immersed in mineral oil. There is a clear need to be able to estimate the aged condition of the coil insulation non-destructively. A portable fibre-optic spectroscopic probe system has been developed which can achieve this quickly by determining the degree of polymerization (DP), an indicator of degradation, to an accuracy of 30 DP units. The system can also determine water content to an accuracy of 0.1% w/w, and oil content and condition, very rapidly from the same measurements. The system uses a broadband spectroscopic diffuse reflectance probe operating in the visible and near infrared (NIR) range and interfaced to dedicated multivariate analysis software. Following calibration and measurement trials in the laboratory, the instrument has recently been adapted for use in the field, in which DP predictions have been made from in-situ measurements on the exposed windings of de-tanked transformers. These values have been validated when checked against DP measurements of the same paper taken in parallel using conventional viscometric methods. The system is now being further optimized and is being developed for other applications in the power industry and other industrial areas such as the paper industry and the plastics recycling industry. The system is modular and different probe types can be attached allowing the measurement of a wide variety of solid material surfaces and liquid media.