For the first time, God has competition." This worrying warning was issued this month by a US technology watchdog known as the ETC Group. Its aim is to alert the world to the imminent creation of "the world's first-ever human-made species".

In the laboratories of the Venter Institute, in Rockville, Maryland, scientists have made the first steps towards building a lifeform from scratch. Welcome to the world of synthetic biology, where entirely new species of viruses or bacteria are designed and created in order to perform useful functions - for example to convert plant matter to fuel or to digest pollution. The aim is to select desirable genes from existing species and string them together to create artificial cells.

The race is now on to create the world's first entirely synthetic organism, and it appears that the Venter Institute - named after Craig Venter, the bio-entrepreneur who mapped the human genome using his own DNA as the template - is leading the way.

The institute has filed an application for worldwide patents on what it believes are the 381 essential genes needed to make an organism.

This "mycoplasma laboratorium" has not yet been created, but already the ETC group has coined a catchy moniker for it. "Goodbye Dolly... Hello Synthia," exclaimed their press release, calling for the patent applications to be rejected on several grounds.

"Synthia may not be as cuddly as a cloned lamb, but we believe this is a much bigger deal," said Jim Thomas of ETC. "These monopoly claims signal the start of a high-stakes commercial race to synthesise and privatise synthetic life forms."

His colleague, Pat Mooney, went further. "For the first time, God has competition," he said. "Venter and his colleagues have breached a societal boundary, and the public hasn't even had a chance to debate the far-reaching social, ethical and environmental implications of synthetic life."

Those who support the technology argue that the world should embrace change. At a symposium in Greenland, experts in synthetic biology issued a statement calling on governments to support their work. "The early 21st century is a time of tremendous promise and tremendous peril," they said. "We face daunting problems of climate change, energy, health and water resources. Synthetic biology offers solutions to these issues: micro-organisms that synthesise new drugs or target and destroy rogue cells in the body.

"As with any powerful technology, the promise comes with risk. We need to develop protective measures against accidents and abuses. The risks are real, but the potential benefits are truly extraordinary."

The moral argument that scientists are playing god or meddling with nature is nothing new. Admittedly, synthetic biology is a leap forward - but, nevertheless, we can and must continue to judge each new proposal on its own merits.

There is no place for moral absolutes. If Craig Venter can create a synthetic microbe with the ability to provide cheap biofuels as a replacement for oil, then to deny that and suffer the consequences would be to play God in the most horrific fashion.