The EU yesterday decided not to follow the Bush administration's lead and declined to impose a blanket ban on federal funding of scientists doing research on embryonic stem cells.

The politicians disappointed scientists, however, by refusing to allow EU cash to be used in projects which involve harvesting stem cells from surplus IVF embryos. Religious and pro-life lobbyists argue this constitutes taking human life, though scientists argue the embryos are currently destroyed when not required by an infertile couple.

In a statement, UK scientists' body the Royal Society said: "It remains to be seen what impact these limitations will have on stem cell research given that they impose greater restrictions than currently exist for EU research funding. It also remains to be seen whether the European Parliament approves these restrictions in November."

A qualified majority voted for proposals which do not include harvesting cells to be included in the £37bn 2007 to 2013 research budget. Poland, Austria, Malta, Slovakia and Lithuania voted against funding the entire field. The German research minister who had earlier told the meeting: "We must conserve human life from its conception. We want no financial incentives to kill embryos," accepted the compromise to fund every stage of stem cell science bar the first.

Speaking to The Guardian, Stephen Hawking, who famously suffers from motor neurone disease, described the EU settlement as a "fudge".

National governments remain free to fund scientists as they wish. The UK research councils have already given funding to therapeutic cloning projects, similar to those faked in Korea by Hwang Woo-Suk.

The worry among academics is that the EU funding restrictions will make pan-European cooperation more difficult, and so slow progress towards cures for debilitating diseases such as Parkinson's. ®