President Lee Myung-Bak promised Monday to spend some $89 million restoring South Korea's reputation as a leader in stem cell research, five years after a scandal tarnished its reputation.
"The government has decided to foster the stem cell industry as a core new growth engine," he said in a radio address, adding about 100 billion won ($89 million) in state funds would be spent on research next year.
Lee said South Korea along with the United States was a world leader in the field a decade ago.
"Unfortunately, there was a disappointing incident which caused inevitable damage to the entire stem cell research community in Korea," he said, referring to cloning pioneer Hwang Woo-Suk, who was found in 2006 to have faked part of his work.
As Seoul's efforts faltered, other nations streamlined regulations and aggressively expanded investment in research, Lee said.
"We must restore our national fame as a stem cell powerhouse," he said, adding the government would ease regulations and set up a state stem cell bank.
Stem cells are master cells that can grow into any bodily tissue. Scientists hope the technology could one day provide cures for such hard-to-treat diseases as diabetes, Alzheimer's and Parkinson's.
Hwang shot to fame in 2004 when he published a paper in the US journal Science claiming to have created the world's first stem cell line from a cloned human embryo.
In a follow-up paper in 2005 in the same journal, he maintained that his team had developed 11 patient-specific embryonic stem cell lines.
But in January 2006 investigators ruled that his findings were faked and said he had produced no stem cells of any kind.
Explore further: New formula invented for microscope viewing, substitutes for federally controlled drug