The House of Lords Select Committee is expected to insist that stem cell research should be used only in exceptional circumstance, where licensed researchers can demonstrate there is no alternative in the search for cures. However, even with these strict conditions the decision will be controversial. Such research is banned in the US and elsewhere and opponents will be incensed by the news that it is to go ahead here.

The select committee was set up last year to examine claims that cloning embryos - using the technique that produced Dolly the sheep - is unnecessary. But it is believed to have rejected the argument that the same medical advances can be achieved using conventional adult cells.

Research on stem cells taken from embryos during treatment for infertility but not used should continue to be strictly regulated, and so should research on stem cells taken from adults, the committee is expected to say.

Supporters of the research believe that scientists should be allowed to use human embryos to find ways of regenerating tissues such as nerves, muscle and cartilage. As well as potentially tackling some terminal diseases, such research would increase the hopes of people with debilitating conditions such as spinal cord injuries, burns and diabetes.

But opponents, including anti-abortion campaigners and the Vatican, believe equally effective treatments could be developed without cloning, using adult cells, and fear that the new step could lead to full human cloning. Peter Garrett, director of research at Life, said: "It is part of a larger effort to con the public into believing that therapeutic cloning is not cloning. The whole exercise has been a cosmetic one from start to finish."

Stem cells are the building blocks for all cell development. The stem cell can divide into identical cells for an indefinite period and it also produces all the specialised cells which are necessary for the formation of virtually all human tissue.

In the first hours and days after fertilisation, stem cells act as the main directors in cell development, constantly dividing and subdividing and 'instructing' cells to specialise - to become blood stem cells, skin stem cells or muscle stem cells, for example.

The US House of Representatives voted to ban all human cloning, including therapeutic cloning, last year. The US Senate is to debate the issue next month. Scientists there have warned of a potential 'brain drain' from the US to Britain unless President George Bush relaxes restrictions.

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