Manganese perovskites based on the compound LaMnO3 are attracting considerable theoretical and technological interest by virtue of their unusual magnetic and electronic properties(1-4). Most notable of these properties is the extremely large change in resistivity that accompanies the application of a magnetic field, an effect known as ’colossal’ magnetoresistance. The origin of this effect has been attributed(5-7) to the presence of magnetic polarons-charge carriers accompanied by a localized (and magnetically polarized) distortion of the surrounding crystal lattice(8,9)-but their existence and properties remains a matter of speculation, Here, using a combination of volume thermal expansion (with and without an applied field), magnetic susceptibility and small-angle neutron scattering measurements, we present evidence for the existence of magnetic polarons above the ferromagnetic ordering temperature, T-c. We detect the spontaneous formation of localized similar to 12-Angstrom magnetic clusters above T-c which, on application of a magnetic field, grow in size but decrease in number. We argue that the response of these magnetic polarons to an applied magnetic field underlies the pronounced magnetoresistive properties in the compounds (La(1-x)A(x))(2/3)Ca1/3MnO3 (where A is Y or Tb).