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New York has become the first state to allow taxpayer-funded researchers to pay women for giving their eggs for embryonic stem cell research, a move welcomed by many scientists but condemned by critics who fear it will lead to the exploitation of vulnerable women.

The Empire State Stem Cell Board, which decides how to spend $600 million in state funding for stem cell studies, will allow researchers to compensate women up to $10,000 for the time, discomfort and expenses associated with donating eggs for experiments.

"We want to enhance the potential of stem cell research. If we are going to encourage stem cell research as a solution for a variety of diseases, we should remove barriers to the greatest extent possible," said David Hohn, vice chairman of the board's two committees that endorsed the move. "We decided to break some new territory."

The little-noted decision two weeks ago puts New York at odds with policies in every other state that provides funding for human embryonic stem cell research and with prevailing guidelines from scientific organizations, including the National Academy of...