The team, led by Dr Miodrag Stojkovic from Newcastle Universitiy, plans to create dozens of cloned embryos using the same technique that was employed by the scientists who created Dolly the sheep.
This process, known as therapeutic cloning, uses eggs left over from failed in vitro fertilisation treatments as tiny biological factories for supplying lines of stem cells.
A single cell from a patient suffering from juvenile diabetes has its nucleus - the part that carries its total complement of DNA removed, inserted into an egg cell left over from IVF and whose genes have already been removed.The resulting embryo will then be nurtured in chemicals to persuade it to divide.
What makes this technique so unique - and controversial - is that the stem cells will be genetically and immunologically identical to each of the diabetes patients that provided an initial skin cell sample, effectively eliminating an immune reaction.
An amendment in 2001 to the Human Embryology Act, which was introduced in 1990, legalised human embryo cloning for therapeutic purposes. Reproductive cloning, where exact replicas of people are created, remains illegal.
The application is expected to be heard this week with an official announcment to be made later this month by the Human Fertilisation and Embryology Authority (HFEA) - a government body that licenses and monitors all human embryo research being conducted in the UK.
Professor Alison Murdoch of the Newcastle Centre for Life told The Observer newspaper: "The idea of the project is to use cloned embryos to create insulin-producing cells that can be transplanted to people suffering from diabetes."
"By using the DNA from the patient as part of the cloning process, this will insure the new tissue will not be rejected by them. The eggs that will be used to make the embryos are donated with patients' consent."
She added: "Out of 10 eggs produced during IVF treatments on average seven are used. The other three are spare and would otherwise have been disregarded. We are not trying to clone a baby ... These embryos have no more moral status than blood taken from a patient."
The decision has raised ethical questions among religious and anti-abortion groups.
There are concerns that this pioneering work that will make it easier for rogue researchers to carry out reproductive cloning work by harnessing the methods and technology used by Stojkovic to carry out illegal work.
In addition, there has been debate as to whether embryonic stem cells even need to be used when stem cells taken from adults could be just as effective. While blood stem cells which are found in the bone marrow of adults and children can be used, embryonic stem cells are considered more flexible to work with.
The Coalition of Americans for Research Ethics argues that: "The destruction of human embryonic life is unnecessary for medical progress, as alternative methods of obtaining human stem cells and of repairing and regenerating human tissue exist and continue to be developed."
If something once thought impossible is eventually achieved and doctors can take a skin cell from a person with diabetes and use that to create immunologically matched tissue that can be injected into a patient to cure their condition, there is no doubt this will have an impact on the pharmaceutical industry.
The prospect of a cure for diseases currently treated by drugs may seem a long way off but if scientists are allowed to carry out the kind of work that Stojkovic is planning, it will certainly remain within reach.