WASHINGTON, Jan 28 (Reuters) - Scientists who made stem cells from ordinary skin cells showed it may not be necessary to experiment on human embryos, President George W. Bush said in his State of the Union address on Monday.

Bush said his government would expand funding "for this type of ethical medical research."

Late last year three teams of scientists reported they had tricked ordinary skin cells into behaving like embryonic stem cells -- the body's ultimate master cell with the potential to produce any type of tissue or cell.

"This breakthrough has the potential to move us beyond the divisive debates of the past by extending the frontiers of medicine without the destruction of human life," Bush said.

"So we are expanding funding for this type of ethical medical research."

The first sources of these cells were human embryos left over from fertility clinics where doctors join eggs and sperm in lab dishes. Scientists are also seeking to make embryonic stem cells using cloning technology. This month a California company said it had used the technology to make human embryos.

Bush has opposed both methods and one of his first acts as president in 2001 was to allow only very limited federal funding of such experiments. He has vetoed bills seeking to expand federal funding of human embryonic stem cell work.

Scientists hope to use stem cells to transform medicine, providing regenerative treatments for diabetes or injuries and seek new insights into diseases like cancer and AIDS. Most experts say the restrictions have held back the entire field.

But Bush defended his stand.

"And as we explore promising avenues of research, we must also ensure that all life is treated with the dignity it deserves," he said. "So I call on the Congress to pass legislation that bans unethical practices such as the buying, selling, patenting, or cloning of human life."

While federal law currently limits funding, it is legal in the United States to try to clone a human being and to patent the results. Other countries have different laws, with Britain and Canada actively promoting human embryonic stem cell research and Austria, Lithuania and Poland banning it. (Editing by Chris Wilson)

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