But the government says its overall potential to speed up research into treatment conditions like Parkinson's disease and Alzheimer's means it must be passed. Labour votes will be whipped at the bill's second and third readings.
Opening the debate, Health Secretary Alan Johnson said the 1990 human fertilisation and embryology act needed updating to keep pace with scientific advances.
He said research would be done within a strict ethical and legal framework.
Mr Johnson said scientists wanted to create so-called "ad-mixed embryos" - usually used to grow stem cells for research - because of a shortage of human eggs and said they would be 99.9% human. They are not allowed to continue after 14 days.
Among Labour critics were Catholic backbencher Geraldine Smith who said the creation of hybrid embryos was "revolting" and of saviour siblings - born in order to help another child - was "appalling".
"We should not be putting parents in that awful position of deciding whether they create a child for the sole purpose of just helping another child," she said.
Conservative former minister Gary Streeter said no therapies had been developed as a result of embryonic stem cell research and he was against "human ad-mixed embryos".
"It seems to me that mixing the life essence of humans and animals in this way just seems to be plain wrong and a slippery slope to who knows where."
But Labour's Ian Gibson, a member of the Stem Cell Foundation, said embryological research was done in a "very regulated environment" under the HFEA.
He said: "There are people in this House, one or two I know, who have got parts of a pig attached to their heart. It keeps them alive.
"I don't think we want any hypocrisy in this area. You can have combined pigs and human beings to keep people alive in this House and elsewhere too."
And another Labour MP, Jim Devine said: "This is not about creating Frankenstein-type monsters."
For the Conservatives, Andrew Lansley said the government had only allowed a "partial" free vote on the Bill - which, as it had "ethical issues at its heart", should have been conducted wholly on a free vote basis.
However, he added that it was important to recognise the old 1990 Act did need updating.
"The legislation is not just about reflecting scientific progress. Because scientists can do something, it does not mean that they should. Ethical boundaries do not shift in a mechanistic way to reflect the utility of new research techniques," he said.
Norman Lamb, for the Liberal Democrats, said the party was "pro-science, in favour of research but within proper limits and with proper safeguards".
He said MPs had a responsibility to conduct the debate in a measured tone, avoiding exaggeration and respecting other viewpoints.
"Church leaders have a particular responsibility in the comments they make," he said.
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