An effective treatment for chronic hair loss in both men and women has come a step closer with a study showing that it is possible to grow new hair follicles from human skin cells.

The results promise to break a 40-year deadlock in attempts to regenerate the crucial structures in the skin that cause hair to grow, which could lead to radically different therapies for treating unwanted baldness, especially in women.

Human hair follicles have proved notoriously difficult to replicate in the laboratory, but a new technique has shown that they can be stimulated to grow in skin tissue and made to produce hair shafts.

Instead of simply transplanting hair follicles from one part of the body to another - which is how hair transplants are currently carried out - a patient's own skin tissue could be used to produce virtually unlimited quantities of follicles for hair-transplant operations, scientists said.

An Anglo-American team of researchers believes the research represents a "milestone advance" in the attempt to stimulate active hair growth in people suffering from chronic hair loss, such as burns victims and women with alopecia, as well as male baldness.

"This approach has the potential to transform the medical treatment of hair loss," said Professor Angela Christiano of Columbia University in New York, one of the lead authors of the study published in the journal Proceedings of the National Academy of Sciences.

"Current hair-loss medications tend to slow the loss of hair follicles or potentially stimulate the growth of existing hairs, but they do not create new hair follicles. Neither do conventional hair transplants, which relocate a set number of hairs from the back of the scalp to the front," Professor Christiano said.

"Our method, in contrast, has the potential to actually grow new follicles using a patient's own cells. This could greatly expand the utility of hair-restoration surgery to women and to younger patients - now it is largely restricted to the treatment of male-pattern baldness in patients with stable disease," she said.

About nine out of ten women with serious hair loss cannot undergo conventional hair transplants because they do not have enough of the necessary hair follicles elsewhere in the body. This new method could generate large numbers of new hair follicles, or regenerate existing follicles, from just a few hundred donor hairs, Professor Christiano said.

"It could make hair transplantation available to individuals with a limited number of follicles, including those with female-pattern hair loss, scarring alopecia and hair loss due to burns," she said.

Specialised cells called the dermal papillae can be induced to form hair follicles in laboratory rats but the same process has evaded scientists working on human dermal papillae for 40 years, said Professor Colin Jahoda of Durham University, the co-leader of the study.

Human dermal papilla cells do not respond in the same way as rat cells when grown in conventional, flat culture dishes. But when they are grown in three-dimensional "spheroids" - drops hanging down from a glass slide - they can be re-programmed into dermal papillae that can trigger the formation of hair follicles when transplanted into human skin grown on the backs of mice, Professor Jahoda said.

Seven patients donated skin cells for the research and in five cases the resulting hair follicles caused the regrowth of human hair on the back of the experimental mice which lasted for at least six weeks, he said.

"It's a key step because it is saying that you can multiply the process. It's not just about one-for-one replacement. But you need to get hair that is the right colour and texture and this will need further work before human clinical trials can begin," he said.

"We also think that this study is an important step toward the goal of creating a replacement skin that contains hair follicles for use with, for example, burn patients," he said.