South Korea President Lee Myung-bak announced on Friday his government will invest $90 million reviving its stem cell research next year aiming for a "core new growth engine" after the industry suffered a setback for more than a year.

"The government has decided to foster the stem cell industry as a core new growth engine following the footsteps of the IT industry," Reuters quoted President Lee as saying.

A decade ago, South Korea was leading the world in stem research alongside the United States. However, a scandal involving scientist Hwang Woo-suk who manipulated key data on cloning stem cells, had been a major blow to the country's scientific community.

China, Britain, and Japan have long taken advantage of South Korea's absence.

"While we were faltering in our quest for stem cell research, other nations streamlined their regulations and aggressively expanded their investments in research," reports Reuters.

In a bi-weekly radio address, the South Korean leader assured the new stem cell research team will ensure reformed regulations for easier clinical and licensing procedures. Analysts believe the reforms are essential in helping Korea Food and Drug Administration and related agencies become flexible in adapting to the changes in the international environment.

"Stem cell research is very rewarding and significant in that it can give hope to those who suffer from rare and intractable disease," said AFP in a related report.

"The government will create a national stem cell bank for use to produce, preserve and supply stem cells to various researchers in the country on a stable basis," Lee continued.

"This field is new and offers infinite room for advancement, and how well we manage at this initial stage will make an enormous difference down the road. The country should now set its eyes on emerging as a stem cell powerhouse," President Lee concluded.