Colour centres in nanodiamonds have many properties such as chemical and physical stability, biocompatibility, straightforward surface functionalisation as well as bright and stable photoluminescence, which make them attractive for biological applications. Here we examine the use of fluorescent nanodiamonds containing a single nitrogen-vacancy (NV) centre, as an alternative nano-label over conventional fluorophores. We describe a series of chemical treatments and air oxidation to reliably produce small (∼15nm) oxidised nanodiamonds suitable for applications in bioscience. We use Frster resonance energy transfer to measure the coupling efficiency from a single NV centre in a selected nanodiamond to an IRDye 800CW dye molecule absorbed onto the surface. Our single-molecule Frster resonance energy transfer analysis, based on fluorescence lifetime measurements, locates the position of the photostable NV centre deep within the core of the nanodiamond.