Work on revolutionary medical treatments for incurable diseases is in danger of being wiped out by a European court ruling on embryonic stem cells, according to leading scientists.

Pioneering therapies for blindness, devastating brain diseases and other intractable conditions could grind to a halt, or move elsewhere, if the court decides to ban European patents on discoveries that involve the cells, the researchers warn.

Senior academics, including Sir Ian Wilmut, the Edinburgh scientist who cloned Dolly the Sheep, said funding for research, including crucial support from companies to turn laboratory breakthroughs into clinical treatments, would collapse if researchers lost the rights over their inventions.

The European court of justice is considering whether to impose a ban on research using human embryonic stem cells on the grounds that it represents an immoral "industrial" use of human embryos.

The advocate general assigned to the case, Judge Yves Bot, has published a recommendation to introduce the ban, a position that will now go before the court's grand chamber for deliberation. Only rarely has the court not followed the recommendations of its advisers.

"If the European court of justice follows the opinion of the advocate general, the reality, and it will become the law, is that all patents that relate to human embryonic stem cells will be eliminated," said Austin Smith, director of the Wellcome Trust Centre for Stem Cell Research in Cambridge.

"This will put Europe at a huge disadvantage. It will wipe out the European bioindustry in this area. It will also cause the governments and the European Commission to say, why should we be funding research in this area any more? There's nothing that can be protected."

In a letter to the journal Nature, 13 senior scientists, including Smith and Wilmut, express "profound concern" over the recommended ban, which "represents a blow to years of effort to derive medical applications from embryonic stem cells".

"Companies will be much less likely to invest in academic research if they are not able to protect their inventions," Wilmut said.

Embryonic stem cells are thought to be unique in their ability to grow into any tissue in the body. While scientists have learned how to reprogramme adult skin cells into other varieties, doubts remain over whether these are safe to use in treatments.

Embryonic stem cells are extracted from surplus IVF embryos donated to medical research by couples with full consent. Most scientists who work with the cells obtain them from long-established batches.

The ruling has arisen from a lengthy legal battle that began in 2004 when the environmental group Greenpeace challenged a patent filed by Oliver Brüstle, a stem cell researcher at the University of Bonn in Germany. The patent described a technique for turning embryonic stem cells into nerve cells. Greenpeace argued the work was "contrary to public order" because embryos were destroyed to collect the cells. "What they would regard as a victory would be a disaster for the development of life saving therapies," Brüstle said.

Pete Coffey, director of the London Project to Cure Blindness, hopes to use embryonic stem cells to treat age-related macular degeneration, a condition that leads to steady and irreversible vision loss. "There is an ethical need to treat disease and that seems to be lost in this debate," he said. "This will be not only be a postcode lottery, but a States vs Europe lottery and that would be madness."

Speaking on behalf of Greenpeace, Christoph Then, a former campaigner with the organisation, said a ruling in its favour would not be the end of stem cell research, but that certain claims in patents, such as those relating to cloning, would be revoked.

"We want clarification that the industrial and commercial use of human embryos is not encouraged. There needs to be some kind of specific protection for human embryos in European patent law," he said.