Scientists have, for the first time, produced liver cells from adult stem cells using technology called iPSC, or induced pluripotent stem cell.
The liver cells were created by manipulating the skin cells to resemble embryonic stem cells, which have the ability to become different cells within the body.
The study, led by the University of Edinburgh's Medical Research Council Centre for Regenerative Medicine, makes possible the creation of a liver cell library, which could revolutionise the development of drugs, making them more efficient and safe.
Professor Sir Ian Wilmut, responsible for the first successfully cloned mammal, Dolly the sheep, and Director of the University's MRC Centre for Regenerative Medicine, said: ''We are now looking for ways to bring this technology into routine use for drug testing.
This is an exciting opportunity and it gives me great pleasure to be able to turn the first recommendation of the UK Stem Cell Initiative into a reality."
These cells could be used to assess the reaction of drugs for different ethnicities, as in different ethnic populations the liver processes drugs differently.
Dr Gareth Sullivan, of the University's MRC Centre for Regenerative Medicine, explains: "What we have been able to do will help drug discovery because it means we are able to represent different populations and make sure the drugs being developed do not have adverse reactions.
"Different populations not only have varying prevalence of disease but there are also genetic differences with regards to how they process drugs."
The research was carried out in collaboration with Harvard Medical School and has been published in the journal Hepatology.
It is hoped the cells could eventually be used in therapy for patients suffering from liver disease and that they may aid research into liver disease.