Ian Wilmut from the Roslin Institute in Edinburgh, dismissing fears that his work would lead to reproductive cloning, on Tuesday said the licence would allow him and his team to study the fatal illness motor neuron disease (MND).
"Our aim will be to generate stem cells purely for research purposes," Wilmut, who will also work with researchers from King's College university in London, said.
It is only the second time that Britain's fertility body, the Human Fertilisation and Embryology Authority, has issued a licence for therapeutic cloning research, which has been legal in the country since 2001.
"Human beings have been changing the world around them for a very long time, in general to good effect," Wilmut said in Edinburgh.
Wilmut's team will harvest stem
cells from human embryos
"I think that the majority of people support this type of research and hope it will be successful in helping to bring useful treatment for diseases like motor neuron disease," he said.
Wilmut's team plans to extract stem cells from patients with MND and implant them in unfertilised eggs to create cloned embryos.
They will then harvest stem cells from the embryos to grow motor neurons - the long nerves which transmit electrical messages from the brain and spinal cord to the muscles.
The technique will not be used to correct the disease, which is caused by the death of motor neurons and affects about 5000 people in Britain, but the study of the cells could help to develop future treatments.
Wilmut shot to fame in July 1996
with the first cloned sheep Dolly
Wilmut shot to fame in July 1996 when he created Dolly the sheep, the first mammal ever to be cloned from an adult cell. Dolly was put down two years ago this month after she developed a lung disease.
Critics of embryo cloning fear that Britain is one step closer to authorising the creation of human clones, but Wilmut dismissed such fears.
"This is not reproductive cloning in any way. The eggs we use will not be allowed to grow beyond 14 days," he said.
"Once the stem cells are removed for cell culture, the remaining cells will be destroyed. The embryonic stem cells that we derive in this way will only be used for research into motor neuron disease."
Clone and kill
Anthony Ozimic, political secretary of the pro-life group Society for the Protection of Unborn Children, accused the government of granting a licence to "clone and kill" and warned that the next step would be manufactured humans.
"All of those killed are unique, never-to-be-replaced, totally innocent human individuals"
Society for the Protection of Unborn Children
"Any 'licence to clone and kill' strikes at the very heart our society's basic rule for living together in peace, which is do not kill the innocent," Ozimic said in a statement.
"All of those killed are unique, never-to-be-replaced, totally innocent human individuals."
Ozimic denied that there was any difference between therapeutic cloning and reproductive cloning, which is banned in Britain, and feared the government would be pressured to allow scientists to reproduce humans in future.
"It will start a slippery slope," Ozimic said, urging the fertility authority to suspend all licences until the United Nations, which is debating the issue of human cloning, makes a decision.
For his part, Wilmut rejected such concerns and said his team would back any decision by the United Nations related to cloning.