Consumer groups and pro-life advocates associated with the campaign to defeat Proposition 71 filed lawsuits against the new panel with the California Supreme Court. That court ruled the lawsuits should have first been filed in lower state courts and the groups have now done that.

The result is that the cloning and embryonic research grants will be delayed because the sale of bonds to raise funds for grants has to be postponed.

"If you issue the bonds under a cloud, the bonds could be unmarketable," said Nathan Barankin, spokesman for state Attorney General Bill Lockyer, told the Argus newspaper.

The lawsuits filed by consumer groups People's Advocate and National Tax Limitation Foundation, allege that the state is illegally funding the stem cell panel without being able to have oversight. The lawsuit also cites violations of conflict of interest and state open meetings laws.

Dana Cody, of the pro-life law firm Legal Defense Foundation, is helping with the lawsuit.

"I'm a taxpayer, and I don't want to fund something that a taxpayer has no control over," Cody told the Argus. "If they want to fund this research, they should use private funding."

The suit also points out that all but two members of the panel were appointed by top state officials, rather than elected or nominated by the public.

Barankin said the state may file its own lawsuit to allow the sale of the bonds to move forward while California courts consider the litigation. The panel voted Thursday to approve the sale of $200 million in bonds to cover the first set of grants.

A new group, Californians for Public Accountability and Ethical Science, made up of pro-life advocates and others who oppose the unproven research, filed the second lawsuit, but have not yet taken it to lower state courts.

Meanwhile, the stem cell panel has adopted conflict of interest rules to help stave off the concerns.

They require full disclosure, but do not require representatives of groups that lobby for disease research funds from voting on grants to such groups. Meanwhile, ten of the panel's members are leading figures at biotech firms that will be competing for research funds.

"Managing $3 billion in taxpayer money is an enormous responsibility and it should not be done by those who have a personal financial stake in how it is used," said Marcy Darnovsky, associate executive director of the Oakland-based Center for Genetics and Society told the San Francisco Business Times.

Her group applauded the new requirements, but said they contain loopholes that warrant further review.