SAN FRANCISCO, Feb. 26 -- A California appeals court on Monday upheld the legality of a voter-approved program to sell $3 billion in bonds to support stem cell research.

Voters backed a statewide initiative in 2004 to form the California Institute for Regenerative Medicine and to authorize it to sell debt to fund the medical research.

The institute "suffers from no constitutional or other legal" defects, the court said. The ruling, if upheld, may clear the way for bond sales to fund research that backers say could lead to cures for diabetes, Alzheimer's and other diseases. Uncertainty over lawsuits challenging the program has delayed bond sales.

"The objective of the proposition is to find, 'as speedily as possible,' therapies for the treatment and cure of major diseases," the court said. "This litigation, however, has interfered with implementation for more than two years."

State Controller John Chiang said in a statement that he is "encouraged that we are one step closer in ending litigation that has tied up the funding for California's historic investment in stem cell research."

Fiscal conservatives and opponents of abortion had challenged the measure's legality, but a state appellate court backed a lower court's ruling that the institute is a legitimate state agency that can issue debt.

The debate over stem cells pits groups that morally oppose using fertilized human eggs for study against those that hope stem cells can unlock cures to diseases.

"Stem cell research holds our best promise to find a cure for debilitating illnesses, like Parkinson's disease and diabetes," Gov. Arnold Schwarzenegger (R) said in a statement.

Those opposing the bond measure include the California Family Bioethics Council, a project of the California Family Council that opposes abortion and same-sex marriage, and the National Tax Limitation Committee.

The opponents have said they will appeal to the California Supreme Court.

"The decision isn't final until all the appeals are exhausted," said Tamar Pachter, the state's deputy attorney general. She said if the state's top court agrees to review the case, a final word on the matter will be unlikely before next year.