San Francisco ? Gov. Arnold Schwarzenegger has ordered a loan of as much as $150 million to the state’s voter-approved stem cell research institute, catapulting California into the lead as the nation’s top public funder of the divisive research.

The governor’s action Thursday, a day after President Bush vetoed expanded federal support for embryonic stem cell science, will kick-start the state’s long-delayed program to pay for cutting-edge research projects.

Schwarzenegger’s decision comes with some financial risk for the state.

In 2004, 59 percent of voters passed Proposition 71 to authorize $3 billion in bonds to fund stem cell research. But litigation has paralyzed the bond process. A Superior Court judge issued a strongly worded ruling in May in favor of the state, calling the bonds valid. However, the plaintiffs – taxpayer and religious groups – have vowed an appeal. If Proposition 71 is deemed unconstitutional, the state loan would not be repaid.