An influential House of Lords committee ruled that embryo cloning -- which federally funded academics in the United States are barred from carrying out -- should be allowed to proceed under strict conditions.
Committee Chairman Richard Harries, the Bishop of Oxford, said the cells taken from embryos within two weeks of fertilization could be crucial for research into finding a cure for debilitating diseases such as Parkinson's and Alzheimer's.
"We conclude that for this to be fully realized, no avenue of research should be blocked off at this stage," Harries told a news conference.
Last year Britain became the first country explicitly to allow the creation of embryos as a source of stem cells -- the primitive master cells that turn into other cell types and could be used to find cures to a wide range of diseases.
The regulations were held up by a court ruling in November after protests by pro-life campaigners, who say creating embryos for research is the first step toward reproductive cloning and that adult human or animal cells should be used instead.
Prime Minister Tony Blair's government rushed through revised legislation and an appeal court upheld the new laws last month, but research was effectively put on hold until Wednesday's announcement by the Lords' committee.
The British Medical Association said it strongly supported the verdict. "This research offers real hope to the millions of patients with conditions like Alzheimer's, Parkinson's and diabetes," it said in a statement.
The committee said one condition for granting a research license to clone human embryos should be that any "cell line" generated from it be deposited in a stem cell bank.
Before any license was granted, health authorities should also ensure that there were no suitable existing cell lines in the bank.
"We are pleased that the Lords have recommended the establishment of a stem cell bank as a matter of urgency. Such a bank will allow researchers to explore this enormous potential in a controlled environment," said Professor Sir George Radda, chief executive of the Medical Research Council.
Critics of human embryo cloning say it represents the first step on a slippery slope to reproductive cloning. "At the very least there should be an international moratorium on embryo cloning until a ban on reproductive cloning is in place," the independent watchdog Human Genetics Alert said.
The Society for the Protection of Unborn Children said the Lord's report was a "whitewash."
"(The committee's) membership was stacked with supporters of human cloning, many with close links to bodies with a vested interest in embryo research," SPUC's Anthony Ozimic said.
But paralyzed "Superman" actor Christopher Reeve says he hopes stem cell research might give him the chance to walk again.
Reeve, confined to a wheelchair since breaking his neck in a riding accident in 1995, told BBC radio this week he hoped scientists would be able to turn the stem cells into spinal cord tissue.
"I would go to the UK, I would go anywhere in the world for therapy that is safe and could accomplish the goal of recovery," he said.