The desirable global scalability of Grid systems has steered the research towards the employment of the peer-topeer (P2P) paradigm for the development of new resource discovery systems. As Grid systems mature, the requirements for such a mechanism have grown from simply locating the desired service to compose more than one service to achieve a goal. In Semantic Grid, resource discovery systems should also be able to automatically construct any desired service if it is not already present in the system, by using other, already existing services. In this report, we present a novel system for the automatic discovery and composition of services, based on the P2P paradigm, having in mind (but not limited to) a Grid environment for the application. The report improves composition and discovery by exploiting a novel network partitioning scheme for the decoupling of services that belong to different domains and an ant-inspired algorithm that places co-used services in neighbouring peers.