(Reuters) - U.S. researchers said on Wednesday they had transformed ordinary mouse skin cells directly into nerve cells in an experiment bypassing the stem cell stage.

Scientists had been working to transform cells into stem cells first to accomplish this and a whole industry has arisen out of the technology, but so has considerable political debate.

Following are some facts about stem cells:

* Stem cells are the body’s master cells, the source of all cells and tissue, including brain, blood, heart, bones and muscles.

* Embryonic stem cells come from days-old embryos and can produce any type of cell in the body.

* Scientists hope to harness the transformational qualities of stem cells to treat a variety of diseases, including injuries, cancer and diabetes. The experiment described in Thursday’s issue of the journal Nature bypasses this step.

* The use of embryonic stem cells has been controversial because some people believe the destruction of any human embryo is wrong.

* President George W. Bush restricted the use of federal funds to only a few batches of already-existing human embryonic stem cells in 2001. President Barack Obama lifted the restriction in March and asked the National Institutes of Health to decide which embryonic stem cells could be used in federally funded research.

* States including California, New York, Connecticut, Maryland, Illinois, Massachusetts and New Jersey acted on their own to fund this research during the years of the Bush restrictions. The latest experiment was done at an institute at California’s Stanford University set up under one such program.

* A whole new industry is pursuing stem cell research, including companies such as Geron Corp, Stemcells Inc, Advanced Cell Technology, NeuralStem, Aastrom Biosciences Inc, Reneuron Group Plc, Osiris Therapeutics Inc, Neostem Inc, Cytori Therapeutics Inc, iZumi Bio Inc and International Stem Cell Corp.

* Shinya Yamanaka and colleagues at Kyoto University in Japan discovered how to make embryonic-like cells from ordinary cells, called induced pluripotent stem cells, first in mice in 2006 and then using human cells in 2007.

* Opponents of embryonic stem cell research say research can focus on iPS cells and adult stem cells, but most experts in the field agree that all approaches must be pursued.