Scientists are planning a research project to create synthetic human blood from embryonic stem cells.
Led by the Scottish National Blood Transfusion Service, it could provide an unlimited supply of blood for emergency transfusions.
And this blood would be free of the risk of infection, say reports which also linked NHS Blood and Transplant and the Wellcome Trust to the project.
Professor Marc Turner, director of the Scottish National Blood Transfusion Service, has been involved in studies investigating how to ensure donated blood is free of the infectious agent behind variant CJD, the human form of "mad cow" disease, the report said.
Several vCJD patients are thought to have contracted the disease by blood transfusions.
A spokeswoman for the National Blood Service for England and North Wales told the Independent that negotiations on the joint research project were at an advanced stage and that legal, rather than scientific, issues were holding up the announcement.
Researchers will test human embryos left over from IVF treatment to find those that are genetically programmed to develop into the "O-negative" blood group, which is the universal donor group whose blood can be transfused into anyone without fear of tissue rejection, the report said.
The relatively rare blood group - it is applicable to about 7% of the population - could then be produced in unlimited quantities from embryonic stem cells because of their ability to multiply indefinitely in the laboratory.
The idea of destroying embryos to create stem cells raises ethical issues, but the newspaper reports that, in theory, just one embryo could meet the nation's needs.
A spokesman for the Wellcome Trust told the Independent that complicated legal issues were still being ironed out between all the parties involved but that an announcement was likely to be made in the coming week.
