A patent newly issued by the British government appears to cover cloned human cells at the earliest stages of development, when they would in theory be capable of developing into a human being.

The patent, issued last week with little fanfare, is raising fears among a handful of anti-biotechnology activists that another ethical barrier has fallen, and that a nation has, in effect, countenanced the patenting of human life. This group, led by author and anti-biotechnology crusader Jeremy Rifkin, is preparing a challenge to the British patent, and will ask that it be narrowed or overturned.

Geron Corp., the California company that controls the patent, argues that it is necessary to protect the company's commercial interests. Ultimately, scientists hope to use the cells of sick people to grow replacement organs, such as hearts and livers, for them.

Geron acknowledges the technique would produce a microscopic ball of cloned cells that might be capable, briefly, of developing into a human baby--but only if transplanted into the womb of a surrogate mother, something the company says it has no intention of doing.

"Does Geron intend to have Aldous Huxley baby farms?" said David J. Earp, Geron's vice president of intellectual property, repeating a reporter's query. "No."

Geron has a patent application pending in the United States. Beyond saying that it covers cloning of non-human mammals, the company refuses to specify precisely what is in that application. "Geron will provide further information . . . upon issuance of the patent," the company said in a recent statement.

The British patent grew out of the same line of research that created Dolly, the cloned sheep. It is one of two patents the British government has issued covering techniques and "compositions of matter" developed during the Dolly research, led by Keith Campbell and Ian Wilmut of the Roslin Institute in Scotland.

Roslin licensed the technology for most purposes to a commercial spinoff that was ultimately bought by Geron, a Menlo Park, Calif., company known for its research on aging and regenerative medicine. The license prohibits the use of cloning technology for human reproduction.

Britain, unlike the United States, does not have a vigorous community of antiabortion activists willing to argue that human life begins when a sperm fertilizes an egg. British law explicitly permits research on human embryos up through a very early stage of development, the blastocyst stage, when the embryo is still a thin, microscopic ball of cells. The Roslin patent covers cloned human cells through this stage.

Earp noted that the patent merely protects the company from encroachment by competitors in a field the company may or may not succeed in commercializing. The patent does not, he said, confer permission to engage in human cloning. Most countries have laws against human cloning or, as in the United States, have declared it to be illegal under existing regulations. Geron has repeatedly said that human cloning would be immoral.

Still, Rifkin and his allies believe the new patent crosses an ethical line. While Roslin's scientists limited their claim to the earliest stages of development, Rifkin and his attorney said they see no reason that existing law in the United States, to say nothing of Britain, would not permit patent claims on human babies up through birth. (At the moment of birth, all sides agree, babies acquire full human rights.)

Rifkin wants a prohibition on patents of embryonic cells written into law in this country and overseas. "Can you hold a human being as 'intellectual property' from conception to birth?" Rifkin said yesterday. "That's the issue here. The door is open." He said he would request congressional hearings.

Earp, the Geron vice president, does not see the matter so starkly. He noted that success in developing and commercializing the technology would save lives. "Many people die every year waiting for organ transplants," he said.

Cloning, however, is still inefficient and a long way, perhaps decades, from commercial use in producing organs. Patents generally come into play when a competitor tries to sell a product based on a company's proprietary technology.

While the current cloning technique requires creating the equivalent of an embryo, Earp said researchers are working to understand what is going on inside cloned cells. That might ultimately permit them, for instance, to use a person's skin cells to create a new liver without having the cells pass through an intermediate "embryonic" stage.

"We are," Earp said, "on the cutting edge not only of law but of science."

Patents on living organisms, from cell lines to improved plants and animals, have long been issued routinely in the United States and other countries. The patents include specialized human cells, such as cancer cells valued in the laboratory for their ability to reproduce forever. The U.S. Supreme Court decided in 1980 that a genetically engineered life form, namely a bacterium capable of breaking down oil spills, could be patented.

The new Roslin patent appears to be an incremental further step, for the first time covering a type of cell known to be capable of growing into an entire human being.

Staff researcher Richard Drezen contributed to this report.

CAPTION: A calf that was born Sunday night in Japan was cloned from a cloned bull, the first time a large animal has been produced in such a process, researchers said yesterday.