Scientists are a step closer to understanding how to "grow" blood in a major breakthrough which could mean an end to using donors, it has emerged.

The study, which has huge potential for the future of medicine, finds that adding a chemical to stem cells taken from unused IVF embryos can create different blood types to order. It takes three to four weeks to grow and can be banked ready for use.

Professor Dan Kaufman, who led the research at the University of Minnesota, said: "We think within five years we will see an end to blood shortages.

"We are around two years away from clinical trials of this, and at least five years away from potential therapies. But this is a big step forward. It is simply another example of what stem cells can do. I think we will see stem cells containing neurons for use in treating brain disorders, for instance."

He added: "They might also provide a source for bone marrow transplants, especially for those patients who do not otherwise have an appropriately matched donor."

He said the use of embryonic stem cells to make red blood cells would also ensure blood transfusions or a source of new blood supply free of any viruses.

It is hoped that large quantities of blood can be created, which could be kept in a central store and given to organisations such as the Red Cross.

The National Blood Service in Britain processes 2.5 million blood donations every year.

Marcela Contreras, the service's director of diagnostics, development and research, said that in principle the "breakthrough" was nothing new.

"Others have been able to grow red cells from stem cells, either embryonic, from cord blood, or from bone marrow," she said.

"The authors are just using different cytokines [growth factors]. It will take a very long time, if ever, to grow enough red cells to make full pints. I do not think that donor red cells will ever be replaced by cultured, stem cell derived red cells, because it would be extremely expensive to grow them in large quantities under GMP conditions.

"In addition, there are the ethical considerations involved with the use of embryonic stem cells for the production of red cells, when there is a safe and relatively cheap alternative."