A US federal appeals court on Friday ruled that government funding for embryonic stem cell research can go ahead, handing a major victory to President Barack Obama's administration.
The ruling tossed out a ban on federal funds ordered by a judge last year, after a coalition of groups argued that a 1996 law makes it illegal to use taxpayer cash to pay for research that destroys human embryos.
The 2-1 decision said opponents of the research were not likely to win their battle in court, so funding should resume.
"We conclude the plaintiffs are unlikely to prevail," read the decision by the US Court of Appeals in Washington, referring to a coalition of groups that challenged the legality of the research.
"We therefore vacate the preliminary injunction."
The ruling was hailed by both the White House and the National Institutes of Health, which allocated about $40 million to human embryonic stem cell research in 2010 and has set aside $125 million this year -- a tiny fraction of its $31 billion budget.
"Responsible stem cell research has the potential to treat some of our most devastating diseases and conditions and offers hope to families across the country and around the world," said Nick Papas, a White House spokesman.
"Today's ruling is a victory for our scientists and patients around the world who stand to benefit from the groundbreaking medical research they're pursuing."
Obama lifted a ban on federal funding for the research in March 2009. His predecessor George W. Bush had blocked government funding for human embryonic stem cell research on new cell lines, citing religious grounds.
At issue in the latest court fight was a 1996 amendment to a US law called the Dickey-Wicker Amendment, which barred using taxpayer funds in research that destroys embryos.
In August 2010, US District Court Judge Royce Lamberth took seriously a court challenge brought by a coalition of groups that opposed the research and issued an order to ban federal money until the legal battle could be resolved.
A series of court decisions followed that temporarily lifted his ban. Friday's decision vacated the Lamberth ruling and allows funding to go ahead, even if more legal challenges may follow.
"Because Dickey-Wicker is ambiguous and the NIH seems reasonably to have concluded that, although Dickey-Wicker bars funding for the destructive act of deriving an ESC (embryonic stem cell) from an embryo, it does not prohibit funding a research project in which an ESC will be used," read the decision.
Researchers say stem cells, the foundation for all human cells, provide promising avenues for scientists and could lead to cures for paralysis, blindness, diabetes and and other diseases.
"I am delighted and relieved to learn of the decision of the Court of Appeals," said a statement by NIH director Francis Collins.
"This is a momentous day -- not only for science, but for the hopes of thousands of patients and their families who are relying on NIH-funded scientists to pursue life-saving discoveries and therapies that could come from stem cell research."
Columbia Law School associate professor Abbe Gluck pointed out that the two judges who ruled together in the case were appointed by the former Republican administrations of Ronald Reagan and George W. Bush.
"Although stem-cell research generally has been a politically charged issue, this decision was handed down by two Republican-appointed judges," Gluck said.
"The opinion is significant because the contrary result -- an order freezing use of federal funds on research on existing stem cell lines -- could have jeopardized much of the incredibly important research underway."
The first two US trials of human embryonic stem cells to treat paralysis and blindness were launched late last year, both by private companies that did not rely on federal funds.
Explore further: US court halts government funding of stem cell research (Update)