By restricting research on stem cells, the Bush administration has spurred many top U.S. science institutions to break from their traditional reliance on federal research grants and strike out on their own to keep the controversial field alive.

UCSF, Stanford and Harvard, among other universities, have set up privately funded programs, in some cases using labs separate from their main campuses, to sidestep the federal restrictions. UCSF and Stanford have raised $11 million and $12 million, respectively, while Harvard reportedly hopes to raise $100 million.

By far the most ambitious proposal is a $3 billion bond measure that appears headed for the November ballot. Designed to fuel stem-cell research at California institutions, the initiative is backed by a coalition of state scientists, private financiers and patient-advocacy groups.

Supporters of the "California Stem Cell Research and Cures Act" argue it will turn the state into a world leader in stem-cell research. But the initiative faces critics who object to the research on moral grounds, as well as fiscal opponents who maintain the state can ill afford the program.

One state -- New Jersey -- already has begun allocating millions of dollars in state funds for stem-cell experiments. And at least five other states are considering declarations of support for the research.

Increasingly, U.S. scientists argue that the Bush administration restrictions are holding back progress. They insist that far more stem cell colonies are needed than the 15 available for National Institutes of Health funding. An additional 17 new lines recently were created at Harvard, which is making them available to the growing network of stem cell laboratories that say they can't rely on the NIH.

"Federal policies are actually inhibiting this research,'' said Keith Yamamoto, a professor and executive vice dean at UCSF.

Stem-cell research is one of the most promising fields of biology. These cells are the early-stage cells that can form into any of the specialized cells or tissues of the body. They were first isolated in 1998 from human embryos left over from in vitro fertilization procedures.

Researchers hope the all-purpose cells can be fashioned into transplant material for people with such diseases as diabetes, Parkinson's and spinal cord injury. But the early investigations have been hampered by ethical and religious concerns, because the embryos must be destroyed in order to produce the stem cells.

In an attempt at compromise, the Bush administration limited federal grants administered by the NIH to research on only stem cells created before Aug. 2001, when Bush announced the policy.

Bush said he wanted to allow the science to go forward, even while preventing tax money from financing work that involves any more destruction of human embryos. But scientists say the result is a stagnant research environment.

The NIH's program is based on "old biology," said Dr. Evan Snyder, head of a stem-cell research program at the Burnham Institute in La Jolla (San Diego County).

The federally sanctioned stem cell lines are "good for generating hypotheses," he said, but most of those lines were generated in "a completely different, haphazard manner," making it impossible to compare results from one cell group with another.

"Some are unstable. Some do bizarre things. One line keeps developing chromosomal abnormalities, spontaneously, no matter what anyone does. You can't tell if that is in the nature of embryonic stem cells, or is something about these cell lines in particular," Snyder said.

Snyder heads a fledgling private stem-cell consortium in Southern California. The idea is to create a cooperative scientific infrastructure, including networks of labs sharing stem-cell lines and other materials, to fill the gap created by the NIH restrictions.But even the architects of this approach acknowledge it's inadequate because of the need to segregate labs by funding source and the reluctance of researchers whose careers depend on NIH grants to get too involved. Elizabeth Blackburn, a UCSF microbiologist and stem-cell research advocate, argues the parallel system can never substitute for the NIH's traditional leadership. Even if the California initiative succeeds, she noted, its grants would be restricted essentially to free- standing laboratories that would have to be kept separate from NIH-supported facilities.

"The NIH has done what it can do," she said. "The problem at the moment is there are so few researchers who want to step into this mess, and work in a fire-walled, quarantined facility. A few can manage, but that's not how you want biomedical research to proceed."

In one of the latest signs of how fractious the stem-cell business is becoming, Blackburn was recently forced off a White House advisory council on bioethics, which she said effectively censored her views from its reports. An essay she wrote about her frustrations appears in the April 1 New England Journal of Medicine, and was released online Friday. "There is a growing sense that scientific research -- which, after all, is defined by the quest for truth -- is being manipulated," Blackburn wrote.

A White House spokeswoman has said that Blackburn's tenure on the panel was up and that others with "different expertise and experience" were needed.

Dr. James Battey, director of the NIH's National Institute on Deafness and Other Communication Disorders and head of a committee that oversees the NIH's stem-cell operation, said he welcomed the creation of an independently financed research enterprise.

"I'm happy to see progress made in any way that progress can be made," he said. "We all share the same goal. ... I think it's a very promising area of research. We need more investment, more people, more approaches."

There's little sign, however, of any political consensus. Although pressure from the scientific community is being felt at the White House to loosen restrictions on stem cell research, Battey noted that's hardly the only source of strong feelings on the issue.

"There are pressures from many, many constituencies on the policymakers," he said, adding that he has been privy to no discussions with White House officials hinting of any relaxation in the rules governing the NIH.

Whatever the merits of the scientific arguments, the ballot campaign in California promises to be strongly colored by the emotion of religious critics of stem-cell research on one side versus family members of people with incurable diseases on the other.

"For me, it's life and death," said John Ames, a Marin County businessman whose 40-year-old son was diagnosed last year with amyotrophic lateral sclerosis, the invariably fatal muscle-weakening condition popularly known as Lou Gehrig's disease.

"Mr. Bush is wrong, wrong, wrong -- he could not be more wrong," said Don Reed, a retired schoolteacher in Fremont whose son sustained a paralyzing neck injury while he was playing football 1o years ago.

Both of them said they put their faith in stem cells as potential cures, and called on the Bush administration to rethink its policies even while they help gain signatures for the California measure. "The NIH has to be part of this," Reed said.

At the same time, opponents make clear that their qualms have not eased. Lately, they argue that the adult-derived stem cells offer much more promise than the embryonic cells, with none of the ethical baggage.

"The practical and scientific obstacles against embryonic stem cell treatments loom larger than ever, and they are rapidly being outpaced by advances in alternatives, including adult stem cells," said Richard Doerflinger, deputy director of anti-abortion activities at the U.S. Conference of Catholic Bishops.

Religious conservatives may be joined in the opposing camp by critics concerned about the financing of the proposed California initiative. The measure is designed so that no payments would be due on the bonds for five years, but critics argue it's still much too expensive a commitment for California.

"We support stem-cell research, but this initiative may be the wrong way to do it," said Dr. Marcy Darnovsky, associate director of the Center for Genetics and Society, an Oakland-based, pro-choice public interest organization.

Three billion dollars, she said, "is a huge amount of public money, our state is still broke, and our basic health care system is underfunded. The initiative locks Californians into paying for one research program among many promising possibilities, and it doesn't do enough to prevent misuses of cloning."