The scientist in charge of the project said it was possible some forms of male infertility could be treatable within five years. In some infertile men, all the right apparatus exists to make sperm but they do not do so, suggesting an "environmental" rather than genetic problem.

It is believed the artificial creation of sperm could enable scientists to use samples of testicular tissue from infertile men to grow functional sperm in the laboratory and then put them back into patients so they could impregnate their partners.

A similar technique could be used to restore fertility to men, and particularly boys, who have undergone radiation treatment for cancer by taking a sample before the procedure and transplanting it back afterwards.

However, some experts were cautious about the potential, pointing out that the mice were born with abnormalities similar to the kind seen in cloned animals such as problems with growth, breathing, walking and, ironically, fertility.

Professor Karim Nayernia, of Newcastle University and the lead author of a paper published yesterday in Cell Development, said: "For the first time we have created life using artificial sperm.

"This research is particularly important in helping us to understand more about spermatogenesis, the biological process in which sperm is produced.

"We must know this if we are to get to the root of infertility. If we know more about how ‘spermatogonial’ stem cells turn into sperm cells, this knowledge could be translated into treatments for men whose sperm is dysfunctional."

He said he believed that at least some of the problems associated with the mice born as a result of the procedure were technical and could be solved reasonably quickly. "We cannot find a universal treatment for all male infertility, but at least we can find, I believe in five years, a resolution for some kinds of male infertility," Prof Nayernia said.

About 280,000 men in the UK do not produce sperm and between 2 and 5 per cent of men – 560,000 to 1.4 million people – do not produce enough to have children with IVF or other forms of treatment. A study of 7,500 men who attended the Aberdeen Fertility Centre between 1989 and 2002 showed that sperm counts had fallen by nearly 30 per cent.

The research team first isolated stem cells, which can turn into any kind of cell in the body, from a mouse blastocyst, an early-stage embryo.

These were then grown into cells that performed as sperm, injected into mouse eggs, grown into early-stage embryos and implanted into the womb of a mouse.

In theory, the genetic material from a skin cell taken from an infertile male could be used to create a cloned embryo from which sperm could be created.

However, the cloning process is still highly inefficient and produces a large number of abnormalities in offspring, which makes this impractical at present.

Dr Allan Pacey, a senior lecturer in andrology at Sheffield University and secretary of the British Fertility Society, said:

"We don’t know why some men would appear to have all the right machinery to produce sperm, but just don’t do it. A strategy may be to take them out and grow them artificially."

And he added: "We don’t really understand why some men do not produce sperm or don’t produce enough sperm. We know bits and bobs, but we have not really put it together.

"This will give us the tools to find out why this is and it may lead to new drugs that will switch sperm production on."

However, Harry Moore, professor of reproductive biology at Sheffield University, was more sceptical about the rate of progress.

"We have to be pretty cautious because we know abnormalities can occur in this process.

"It is a milestone in that this is the first time we have cultured from germ [early sperm] cells to a stage where the egg could be fertilised and we have got offspring. It shows you the potential of these cells, but there is a long way to go."

Anna Smajdor, a researcher in medical ethics at Imperial College London, said the development was "a hugely significant breakthrough".

But she added: "Being able to create these cells in the laboratory will pose a serious conceptual challenge for our society.

"Who is the father of offspring born from laboratory sperm? A collection of stem cells in a petri dish? The embryo from which the cells were derived?"

The world’s first test tube baby, Louise Brown, is pregnant.

Ms Brown, 27, who married former bank security officer Wesley Mullinder, 36, two years ago, is due to give birth in January. The couple started trying for a child after their marriage in September 2004.

Her husband said: "We are overjoyed that Louise is expecting. We are so excited about becoming parents, and I know that Louise will make a fantastic mother. We are already beginning to think about getting the house kiddy-proof."

Ms Brown’s birth on 25 July, 1978, created headlines throughout the world and followed a decade of research on finding ways to fertilise human eggs outside the body.

She was born by Caesarean section at the Royal Oldham Hospital in Lancashire thanks to the efforts of Dr Robert Edwards, who jointly invented the IVF technique that led to her birth, and the late Dr Patrick Steptoe, a gynaecologist at the hospital.

The two men successfully removed a single ripe egg from the ovary of Ms Brown’s mother Lesley and fertilised it in a glass dish with sperm from her husband. The resulting embryo was implanted back into her body, and she became pregnant.

She had tried for nine years to have a baby with her husband John before the IVF birth, and the couple later had their other daughter, Natalie, through the same process.

Dr Edwards was a guest of honour at Louise’s wedding in Bristol.