Plug in to organize category list

Hello,

On my site the categories are listed in the left hand sidebar. The problem is that we have so many now that the list is unseemly. Is there a way (plug-in or code) to have only an alphabet appear under the heading ‘categories’, and then to have people linked to categories starting with the letter of their choice once they click on it.

Thanks

In case it is important, I use a Blue Zinfandel theme by Brian Gardiner.