The public will be asked whether scientists should be allowed to create hybrid human-animal embryos, regulators have announced.
Early embryos yield stem cells
The Human Fertilisation and Embryo Authority says it will not rule on any research applications until a consultation has been completed.
Ministers proposed outlawing such work after unfavourable public opinion.
Two UK teams have put in requests to mix human and animal cells in order to find cures for degenerative diseases.
PM Tony Blair last week said any new law would have "flexibility" to support scientific research that helped people.
There had been a question mark over whether it was within the HFEA's remit to license such work.
But the HFEA says it should judge the work under the current law.
Angela McNab, chief executive of the HFEA, explained: "These sorts of research would potentially fall within the remit of the HFEA to regulate and license, and would not be prohibited by the legislation.
"There needs to be a full and proper public debate and consultation as to whether, in principle, licences for this sort of research could be granted."
But she said from the evidence considered so far, the issue was "far from black and white".
Scientists say doing the work could provide cures for conditions such as Alzheimer's. But opponents say the research tampers with nature and is unethical.
The public was consulted on hybrid embryo work among other issues for an overhaul of outdated laws on fertility treatments and embryo research.
However, the HFEA says a bigger consultation dedicated purely to hybrid work is needed.
The consultation is expected to be completed in the Autumn.
Liberal Democrat MP Dr Evan Harris, who is co-ordinating a coalition of experts in a campaign for this research to be supported, said he was heartened by the news that the HFEA was consulting further.
He added: "In the absence of advice from the HFEA to ban this research, it is unlikely that parliament will support an ill-thought-out government policy in the face of overwhelming support from the experts, UK scientists, clinicians, patient groups and select committees, to allow such research."
Dr Stephen Minger, a scientist at King's College London who has applied to do hybrid work, said: "Although we are naturally disappointed that the HFEA has not recommended that our research applications go to the licensing committee, we are happy with their decision to consult both public and scientific opinion."
Professor Lyle Armstrong, from Newcastle University and head of the second team of scientists applying for a licence to do hybrid work, said: "The possibility of a further public consultation exercise gives us the opportunity to explain why the science is so very important for Britain and humanity in general."
The Medical Research Council said it would "continue to talk to the government and the public about the benefits this type of research could yield".
Dr Donald Bruce of the Church of Scotland said while the Church was not opposed to all research involving embryonic stem cells, it was expressly opposed to research involving the creation of human-animal 'hybrid' cloned embryos, calling the work unethical and unnecessary.
He explained: "Some experiments, no matter how medically useful, would be unethical. Research with animal-human cloned embryos would breach moral norms."