In a victory for President Barack Obama's administration, a US federal judge dismissed a lawsuit that had temporarily blocked government funding for embryonic stem cell research.

Wednesday's ruling was issued by Judge Royce Lamberth, who last year saw merit in the plaintiffs' case and stunned many scientists by ordering a halt to taxpayer spending on the research while the legal battle was resolved.

In the end, Lamberth, the chief judge of the US District Court for the District of Columbia, decided to uphold an appeals court decision in April that ruled against the plaintiffs, two scientists who argued it was illegal to use government cash for research that destroys human embryos.

His decision was immediately hailed by the National Institutes of Health, which allocated about $40 million to human embryonic stem cell research in 2010 and has set aside $125 million this year -- a tiny fraction of its $31 billion budget.

The White House also applauded the move, calling the ruling "good news" for people with Alzheimer's, Parkinson's or heart disease.

"President Obama is committed to supporting responsible stem cell research and today's ruling was another step in the right direction," said his deputy senior adviser Stephanie Cutter.

"While we don't know exactly what stem cell research will yield, scientists believe this research could treat or cure diseases that affect millions of Americans every year."

Obama lifted a ban on federal funding for the research in March 2009. His predecessor George W. Bush had blocked government funding for human embryonic stem cell research on new cell lines, citing religious grounds.

At issue in the latest court fight was a 1996 amendment to a US law called the Dickey-Wicker Amendment, which barred using taxpayer funds in research that destroys human embryos.

In August 2010, Lamberth took up a court challenge brought by a pair of scientists who opposed the research and issued an order to ban federal funding until the legal matter was sorted out.

A series of court decisions followed that temporarily lifted his ban.

Wednesday's summary judgment by Lamberth dismisses the case on the basis that the US government has defined the law as barring federal funding for the act of deriving stem cells from an embryo -- a process that involves the embryo's destruction -- but not any other form of research involving human embryonic stem cells.

Legal expert Abbe Gluck, an associate professor of law at Columbia University, told AFP the ruling was no surprise, given that the federal appellate court had already ruled the plaintiffs were unlikely to succeed.

"In April, the federal court of appeals vacated the 'freeze' on stem-cell research that the district court had previously granted, on the ground that the plaintiffs were unlikely to succeed on the merits of the ultimate case," she said.

"The core of that appellate holding was that the court should defer to the expert agency's -- here NIH's -- interpretation of the statute, and the district court essentially held today that it was bound by the higher court's ruling."

NIH director Francis Collins said his agency was "pleased with today's ruling. Responsible stem cell research has the potential to develop new treatments and ultimately save lives."

He added: "This ruling will help ensure this groundbreaking research can continue to move forward."

The American Association for the Advancement of Science, an international non-profit group that publishes the journal Science, also expressed support for Lamberth's decision.

"The scientific consensus is that embryonic stem cell research is an extremely promising approach to developing more effective diagnostics and treatments for devastating conditions such as diabetes, spinal cord injuries and Parkinson's disease," said chief executive Alan Leshner.

"Judge Lamberth's injunction last year threatened to cause real harm to researchers in this field and discourage the next generation of stem cell scientists."

The defense team for the scientists who brought the lawsuit said in a statement that they are "considering all options for appeal."

The first two US trials of human embryonic stem cells to treat paralysis and blindness in people were launched late last year, both by private companies that did not rely on federal funds.