Scientists are set to receive a huge cash boost over the next 10 years to keep Britain in the forefront of stem cell research.
Today the Government announced an additional £50 million spending on stem cell science over the next two years, doubling the amount already committed.
It also gave an indication of more to come, in response to a report calling for hundreds of millions of pounds in extra Government funding.
An expert body set up by Chancellor Gordon Brown, the UK Stem Cell Initiative, recommended that Government spending on the research should be increased by between £350 million and £520 million over the next decade.
Without making specific long-term funding promises, the Government said it welcomed and accepted the report's proposals.
Health Minister Jane Kennedy said: "It is important we continue our long-term commitment to stem cells.
"They have the potential to help millions of people and could lead to new treatments for serious diseases for which there is currently no cure."
Stem cells are "master" cells with the potential to develop into different kinds of tissue.
Scientists hope that one day they will be used to treat a host of diseases, many now incurable, including degenerative brain conditions such as Parkinson's and diabetes.
Britain is a world leader in stem cell research, but without extra funding it could be left trailing other countries, which are already investing heavily in the field.
The UK SCI, chaired by Sir John Pattison, drew up a broad 10-year strategy aimed at keeping Britain a front-runner in stem cell science.
It included setting up a Government-backed consortium of pharmaceutical, healthcare and biotech companies to investigate the medical potential of stem cell technology.
The report also called for a public/private partnership to co-ordinate industry and state funding.
The Government should also strengthen support for stem cell research with the establishment of centres of excellence, said the report.
Further development of the UK stem cell bank - a stem cell storage facility that can be used by scientists, was also needed.
Sir John said today: "The UK should spend at least an additional £350 million pounds over the next decade on stem cell research if we wish to maintain our international leadership in this area.
"It is vital that we maintain and increase the level of public funding. The ultimate health and wealth gains the UK will enjoy are directly proportional to the additional investment we are proposing."
Prof Michael Whitaker, chair of the Institute of Stem Cell Biology and Regenerative Medicine Board, a collaboration between the University of Newcastle upon Tyne and the University of Durham, welcomed the findings.
He said: "It is clear that a sustained programme of funding over several years is crucial if the UK is to maintain its position as world leader in this pioneering area of science.
"There has been considerable recent investment in California, Korea, Spain, Israel and elsewhere in stem cell research. Sir John's report is intended to ensure that the UK keeps its competitive edge.
"Here in Newcastle, we have realised for some time that further investment was necessary to develop our expertise in this area and to work towards creating stem cell therapies that will be of benefit to patients.
"Yesterday we were awarded £9.8 million by our regional development agency, One NorthEast, to create a new suite of world-class facilities for stem cell research in Durham and Newcastle, including new laboratories."
The new funding is part of a package of nearly £25 million put together by the development agency, the University of Newcastle upon Tyne and the University of Durham to establish the regional Institute of Stem Cell Biology and Regenerative Medicine (ISCBRM).
Speaking at the Advancing Enterprise conference in London, the Chancellor said: "Britain should be the world's number one centre for genetic and stem cell research, building on our world leading regulatory regime in this area. I can today announce that we are taking forward a new public-private partnership to invest in pre-commercial aspects of stem cell research and co-ordinate future research."
Science and Innovation Minister Lord Sainsbury said: "The UK is a world leader on stem cell research and governance. The UK Stem Cell Initiative has provided strong recommendations that Government will build on to maintain our world leading position in the future."
Responding to the promise of an extra £50 million, Sir John said: "That fits very nicely with the 2006-2007 profile that we've suggested. In that sense I'm very pleased with the Government response, but that's only two years."
As well as opening the door to new treatments, stem cell research could greatly improve understanding of fundamental cell biology, said Sir John. This may have important indirect benefits, especially in relation to cancer.
But he pointed out that the practical rewards of the research may not come for many years.
"We might see something spectacular in the next two years, but it might take five or 10 or 15," he said. "We have to be a little bit patient, I think."
Welcming the report, Medical Research Council chief executive Colin Blakemore said: "The MRC is at the heart of British stem cell science. We are keen to play our part to the best of our ability to fulfil as many of the recommendations as we can of the Pattison Report. The MRC is increasing the resources it's putting into stem cell research. We're also planning to spend up to another £5 million pounds to finance the second phase of the UK Stem Cell Bank.
"We've worked closely with the UK Stem Cell Foundation ahead of Sir John's report to set up a shared process to review applications for clinical trials for stem cell therapy. We want to promote the rapid development of treatments as soon as they are shown to be valuable and safe".