WASHINGTON (Reuters Health) - With the Bush administration's refusal to fully fund embryonic stem cell research, the US is falling behind in the effort to find a cure for a range of diseases, one of the nation's leading scientists and entrepreneurs said on Tuesday.

William Haseltine, CEO of Human Genome Sciences and founder of the Society for Regenerative Medicine, told reporters at a conference on stem cell and other regenerative therapies that the administration's policies are severely delaying the development of treatments for diseases like Parkinson's.

Stem cells are immature "master" cells with the potential to develop into any type of cell in the body. Researchers believe they can be used to replace the diseased tissue that marks degenerative conditions like Alzheimer's, Parkinson's and heart disease. Last year, the Bush administration put restrictions on federal funding for stem cell research, which some US groups oppose because harvesting the cells from human embryos destroys the embryo.

The prospects for additional government funding of stem cell research are "dim under the current political context," Haseltine said, adding that he believes that the issue of providing money for experiments that take cells from human embryos has been "inappropriately tied to abortion politics.

"It is a dismal situation," Haseltine said, adding that with government funds drying up, more researchers will go overseas where the climate is less hostile.

"We will see many of our best scientists leave our shores," he predicted. Stem cell research is the most exciting area of exploration for biologists, he said, asking, "Are we going to shut that out for a whole generation of scientists?"

Haseltine said withholding funds from American scientists "will not stop the progress" of stem cell research in other countries.

He argued that the US, whose scientists have already invested so much time and energy in stem cell research, should be the global leader in the field.

Private investors have not stepped into the breach, Haseltine noted. Venture capitalists like a quick return on their investment, and much of stem cell technology's promise is years away from the market, he said.

And there are other factors that prevent companies from moving ahead quickly, including the bad economy, difficult hurdles at the Food and Drug Administration and management problems, according to Haseltine.

Conference chairman Ian Wilmut agreed that much of the still-needed early work has to be done in universities, with government funding. But, the technology is also not far from being bankable, added Wilmut, who led the team that created the world's first cloned animal, Dolly.

Large companies need visionaries to see stem cells' promise, and to put their money up, he said.

"I think this technology needs a Steve Jobs," Wilmut said, referring to the iconoclastic founder of Apple Computer.