Human embryo research is highly controversial
"We welcome the report's recommendation that stem cell therapy and cell nuclear replacement should be permitted under strict legal controls, enforcing clear ethical principles," said Dr Diana Dunstan, the MRC's director of research management.
"While growing whole organs for transplantation may be many decades away, the production of human nerve cells to treat people with Parkinson's and Huntington's could be an early benefit of this type of research."
MPs to vote
Although ministers endorsed the report's recommendations, MPs will be given a free vote on the legislation later in the year.
The Royal Society called on MPs to back an extension of the 1990 Human Fertilisation and Embryology Act that would allow the research to go forward.
However, experts are stressing that if MPs do give the go-ahead to the research, there must be strict guidelines. The new legislation would outlaw human cloning for reproductive reasons, ensuring scientists are banned from "making" copies of people.
"If supported by Parliament, the recommendations of the Donaldson report would ensure that research was properly regulated," said Professor Bateson.
"Reproductive cloning would continue to be a criminal offence, but the controlled use of cell nuclear replacement would be permitted to produce embryonic stem cells for research."
Ethical objections remain
Although the research could help find cures for previously untreatable diseases, it is firmly opposed by some churches and groups campaigning against abortion.
A spokesman for the charity Life, which is strongly opposed to cloning, said: "Human cloning is not only immoral, it is unnecessary."
This assertion was questioned by Dr Michael Jarmulowicz of the Guild of Catholic Doctors. He said the very latest research, published after the Donaldson panel finished taking evidence, suggested adult stem cells might be more useful than scientists had previously thought.
Stem cells OK
"We're very much in favour of progress and adult stem cell technology should be promoted," said Dr Jarmulowicz. "In fact, the Royal Society, in its own recommendations to the committee, said that adult stem cells were a better option and should be used."
"Society can never operate in a moral vacuum," he added. " We always, at every stage, must think of the ethical and moral issues involved."
The Church of Scotland echoed the sentiment that cloning research should focus on avoiding the use of embryos, to enable direct programming from one body tissue type to another.
Dr Bruce, Director of the Church of Scotland Society, Religion and Technology Project, said: "Since direct reprogramming might be impossible without limited human embryo research, this poses a deep ethical dilemma. Should a very limited number of experiments be allowed to obtain the data necessary to avoid any such use of embryos in future?"
Although the Church of Scotland welcomed the decision for a free vote in Parliament, it believed that the autumn was too soon to have a vote on such complex and major issues, which it said were little understood by either the public or MPs.
"The Donaldson report should now form the start of the debate, not the end," said Dr Bruce.