Prime Minister Tony Blair's Minister of Public Health told British media that she and other cabinet members would present a proposal Thursday to lawmakers that would update a 1990 package of legal provisions on human fertilization and embryology.
Under the proposed legislation, scientists would only be permitted to create the embryos for research into serious human illnesses, and they would require a government license to do so.
In the proposed law, the embryos created would not be allowed to survive for more than 14 days.
In January, British scientists warned that a then-impending government decision to ban stem cell research using hybrid embroys would jeopardize finding treatment and cures for degenerative diseases such as Alzheimer's and spinal muscular atrophy.
But the government's collective mind has now changed, due, according to Public Health Minister Caroline Flint, to advances in science.
"We saw this was an area where these (hybrid embroys) could be used for scientific benefit," Flint told the British Broadcasting Corporation.
The medical community has welcomed the government's new proposal, but opponents of stem-cell research and Britain's pro-life movement have reacted with predictable animosity.
Josephine Quintavalle, speaking to the BBC on behalf of her campaign group Comment on Reproductive Ethics, said: "It is appalling that the government has bowed to pressure from the random collection of self-interested scientists and change its prohibitive stance."
"This is a highly controversial and terrifying proposal, which has little justification in science and even less in ethics," added Quintavalle.
But Blair's ministers have come over to the side of medical researchers, including Dr. Stephen Minger of London's King's College, who told the BBC: "This research is important because these stem cell lines could help us to understand what goes wrong in catastrophic neurological disorders like Alzheimer's disease and Parkinson's disease."
The debate over creating embryos solely for the purpose of destroying them for research is alive and well in Britain, and a hearty debate is expected in parliament over the merits of the ministers' proposal.
Meanwhile, the debate over stems cells in the United States moved to California this week, where the state Supreme Court cleared the way for the stem cell research agency to distribute billions of dollars in grants.
The court's decision Wednesday shot down a last-ditch legal challenge by abortion opponents and other stem cell research critics.
The case brought the opponents had blocked the agency from distributing $3 billion in research grants.
CBS News reporter Margie Shafer says California's voter-backed stem cell agency is the largest source of funding for human embryonic stem cell research in the world.
"Today's action by the California Supreme Court is a victory for our state because potentially life-saving science can continue without a shadow of legal doubt," said Gov. Arnold Schwarzenegger.
Meanwhile, a study at Stanford University has found that the initial cost of California's stem cell research program is over-shadowed by its potential economic benefits for the country.
The study has concluded that if the $3 billion now freed up for research leads to a cure for even one disease, it could save America's health industry $15 billion in treatment, reports CBS News reporter Mike Pulsipher.
However, one Stanford researcher cautioned that the discovery of a new vaccine or cure is far from guaranteed by the new infusion of cash. "There's a lot of science to be done over the next 20, 30 years," said Lawrence Baker.
Finding money for scientific research into the highly controversial field of stem cell research is just one half of the battle being waged by the medical community.
The research, of course, also requires embryos — and the British government is about to enter a serious debate on whether combining animal and human DNA is a viable solution to that problem.