A polymer composite composed of a polymerised mixture of functionalized I carbon nanotubes and monomer which chemically reacts with the functionalized nanotubes. The carbon nanotubes are functionalized by reacting with oxidising or other chemical media through chemical reactions or physical adsorption. The reacted surface carbons of the nanotubes are further functionalized with chemical moieties that react with the surface carbons and selected monomers. The functionalized nanotubes are first dispersed in an appropriate medium such as water, alcohol or a liquefied monomer and then the mixture is polymerised. The polymerisation results in polymer chains of increasing weight bound to the surface carbons of the nanotubes. The composite may consist of some polymer chains imbedded in the composite without attachment to the nanotubes. The resulting composite yields superior chemical, physical and electrical properties over polymer composites that are only physically mixed and without binding to the surface carbons of the nanotubes.