To Determine the Effects of Avosentan on Doubling of Serum Creatinine, End Stage Renal Disease and Death in Diabetic Nephropathy

Inclusion Criteria: * Male or female patients between 21 and 80 years of age, inclusive * Patients with type 2 diabetes mellitus diagnosed for at least 3 years and receiving oral anti-diabetic treatment and/or insulin * Female patients will either be: * Post menopausal for \>= 2 years; * Surgically sterile; * Or, if sexually active and of childbearing potential, using double contraception, with at least one method being barrier contraception. Women of childbearing potential (defined as those who are not surgically sterile, have not had a hysterectomy or are not 2 years' post-menopausal) must have a negative pregnancy test at screening and at randomisation. Pregnancy tests will be repeated monthly during the study * Proteinuria defined as ACR \>= 35mg/mmol * Male patients with serum creatinine between 1.3 and 3.0 mg/dL * Female patients with serum creatinine between 1.2 and 3.0 mg/dL * On standard treatment for diabetic nephropathy (such as ACE inhibitors, ARBs or the combination thereof) for at least 6 months before screening. Patients who are intolerant to ACE inhibitors or ARBs will be allowed to enter the study * Able to provide written informed consent prior to study participation Exclusion Criteria: * Patients with type 1 diabetes mellitus * Patients with proteinuria of non-diabetic origin * Patients with a renal transplant * Patients who have undergone nephrectomy * Patients with an estimated GFR \<= 15 mL/min * Patients with blood pressure \>= 160/100 mmHg with or without antihypertensive medication * Patients with glycosylated haemoglobin (HbA1c) \> 12% * Patients with normal sinus rhythm who do not have a pacemaker, are not taking antiarrhythmic drugs and do not have complete bundle branch block, but who have absolute QT or QTc \>500 msec * Patients with recent (60 days) percutaneous transluminal coronary angioplasty (PTCA), percutaneous coronary intervention (PCI), coronary artery bypass grafting (CABG), or any other major surgical intervention * Patients with recent (60 days) acute myocardial infarction, unstable angina, stroke or transient ischaemic attack * Patients with CHF New York Heart Association grade III or IV * Patients with life-threatening arrhythmias including those at high risk for QT/QTc prolongation such as a family history of Long QT Syndrome, severe hypokalaemia, etc. * Patients who are positive for hepatitis B surface antigen or hepatitis C antibody at Visit 1 (screening) and who have abnormal liver function (specifically ALAT/ASAT \>1 x ULN) * Patients who have been treated with an endothelin receptor antagonist in the 3 months prior to screening * Patients being treated with spironolactone or eplerenone at entry into the study * Pregnant or lactating women * Patients with a neoplasm who are deemed to live \< 12 months * Patients with history of alcohol and/or drug abuse * Patients with a known history of a major psychiatric condition that would interfere with the conduct of the trial * Patients with active endocarditis and/or pericarditis * Patients allergic to avosentan or any other endothelin receptor antagonist * Patients who participated in another clinical study or who have donated blood within 60 days of being randomised to this study.