The decision is likely to reignite an ethical debate on human therapeutic cloning as opponents fear it could be used to clone babies, which is outlawed in Britain. In a procedure based on the same technique that created Dolly, the first cloned sheep, the scientists will create embryos as a source of stem cells to help develop new treatments for diabetes and degenerative diseases such as Alzheimer's and Parkinson's and potentially find a way to regenerate nerve growth when the spinal cord has been damaged.

They will duplicate early-stage embryos and extract stem cells from them. The embryos will be destroyed before they are 14 days old and will never be allowed to develop beyond a cluster of cells the size of a pinhead. "This research should give valuable insight into the development of many diseases and benefit millions of patients," Dr Miodrag Stojkovic, a member of the team at Newcastle University in northern England, told Reuters on Tuesday. "It's not about cloning babies.

"To my knowledge this is the first time in Europe that such a licence has been granted," he added.

Earlier this year, scientists in South Korea announced that they had produced the first human cloned embryos.

FIVE YEARS BEFORE TREATMENT: Stojkovic said it would be at least five years before patients could receive stem cell treatment based on their work. Stem cells are master cells of the body that can develop into other cell types. The cloning technique involves removing the nucleus of a human egg cell and replacing it with the nucleus from a human body cell, such as a skin cell.

Britain legalised therapeutic cloning in 2001, under licence from its reproductive regulator, the Human Fertilisation and Embryology Authority (HFEA). It is backed by medical charities but pro-life groups are opposed to the technique, arguing that it creates human life with the purpose of destroying it once the research is completed.

"Cloning involves the manufacture of a new kind of human being...with the express purpose of destroying it once its stem cells are removed," said Professor Jack Scarisbrick, chairman of the group Life.

"It is the manipulation, exploitation and trivialisation of human life of a most frightening kind," he said.

HFEA chairwoman Suzi Leather said the regulator had given careful consideration to all the scientific, ethical, legal and medical aspects of the project. "This is an important area of research and a responsible use of technology," Leather said.

Scientists welcomed the decision, saying it was a major step in allowing medical researchers to understand and cure diseases.

"Therapeutic cloning will in the immediate future be a vital tool in harnessing the power of stem cells to treat some of the major diseases that threaten humankind," said John Harris, professor of bioethics at Manchester University.