The Government has said human cloning is ethically unacceptable and scientists must not dabble with experiments that might lead to the creation of "experimental" human beings.

The Department of Trade and Industry acknowledged that animal cloning - which hit the headlines in February when scientists cloned the sheep Dolly from adult cells - had the potential to produce significant benefits for research into human and animal health.

Now, the Scottish scientists who made Dolly have taken another big step forward by using human genes in the cloning of two more lambs.

The lambs, named Molly and Polly, have been cloned with a human gene so that their milk will contain a blood-clotting protein that can be extracted for use in treating human hemophilia.

The development was announced at the same time as the DTI published its response to a report by the Commons select committee on science and technology.

The DTI emphasised that there were limits to the extent to which researchers should attempt to push back scientific barriers.

After the successful cloning of Dolly, governments around the world have been struggling to tread a fine line between encouraging scientific progress and preventing horrendous abuses of a new technology.

In May, a US presidential advisory committee agreed to a moratorium on the cloning of human beings by public or private institutions.

Dolly, the first successfully cloned mammal

The DTI document said: "The committee reaffirmed its desire for a ban on the deliberate cloning of human beings.

"The Government has since reaffirmed its policy that the deliberate cloning of human individuals is ethically unacceptable, though it is not opposed in principle to the use of cloning techniques where research is being carried out on serious inherited illnesses, and where the end result will not involve the cloning of human individuals."

But the Government did say it was keen to see international agreements on controlling human cloning and was exploring with the Human Fertilisation and Embryology Authority the possibility of holding a consultation exercise to assess the public's particular sensitivities.

The government will keep under review whether the rapid development of cloning technologies requires the strengthening of legislation.

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