The Australian government has issued its first licence allowing scientists to create cloned human embryos to try and obtain embryonic stem cells.
The in-vitro fertilisation firm Sydney IVF was granted the licence and reportedly has access to 7,200 human eggs for its research.
If the firm is successful it would be a world first, the Australian government's National Health and Medical Research Council (NHMRC), which granted the licence, said on Wednesday.
Scientists in other countries have made stem cells they believe are similar to embryonic cells using a variety of techniques, but none have been able to extract embryonic stem cells from cloned human embryos.
An Australian ban on the research, known as therapeutic cloning or somatic cell nuclear transfer, was lifted in December 2006 after a rare conscience vote in the national Parliament.
But the use of excess IVF embryos and the creation and use of other embryos in research is restricted by law through national legislation. Human cloning for reproductive purposes is banned.
Chair of the NHMRC's licensing committee, John Findlay, said Sydney IVF's research would be closely monitored.
"They have been given a licence to do therapeutic cloning," Dr Findlay said, adding the scientists are not licensed to reach the foetal stage.
"They can go to the stage called blastocyst. They must stop at that point," he said. The blastocyst is a very early-stage embryo not yet implanted into the womb. Dr Findlay said scientists will try and create stem cells from patients who have abnormalities or create stem cell lines which will be compatible with patients which have given the cells.
Initially, any stem cells extracted would be used to test new drugs to fight diseases such as muscular dystrophy and Huntington's disease, and later therapeutic cloning would be used to produce body tissue matched to patients.
The director of Australians for Ethical Stem Cell Research, David van Gend, criticised the issuing of the licence, saying new technology meant cloning was no longer necessary.
"We have regulations in Australia such that the abuses of cloning wouldn't happen here, we will not get live birth cloning," he told local radio.
"We won't get cloning right through to the foetal stage in order to use them for organ transplants, but if we teach the world how to clone you can be quite sure it will be used in less rigorous jurisdictions."