Forget Dolly the sheep - researchers at Glasgow and Edinburgh universities are developing new software to allow animation and games companies to "clone" real people to create realistic animations.

Current methods of creating animated human characters are time-consuming, expensive and not very realistic. Researchers aim to create new technology that will improve realism dramatically.

New software tools will enable 3-D whole-body data from specific individuals to be combined with modelling to create a "cloned" synthetic character.

The project is one of 36 to share ?5.4 million "proof of concept" funding for Scottish research. The scheme, managed by the national development agency Scottish Enterprise, promotes commercialisation by funding the early development of research ideas.

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John Archer, principal of Heriot-Watt University and convenor of Universities Scotland's research and commercialisation committee, said it was encouraging that the fund, launched in 1999, had been extended for another three years, and its scope widened.

"Ideas are now flowing out - the early trickle is turning into a torrent," he said.

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The latest winners include Dundee and Napier universities, collaborating on novel approaches to flat panel displays for electronic devices, and Strathclyde University, which is developing the next generation of lasers for telecommunications.

Aberdeen University is working on improved scanning systems to monitor the responses of cancers to treatment, while Napier is researching the chemical synthesis of new anti-cancer drugs. Edinburgh University is developing a new personal alarm for elderly people, and Glasgow is creating new medicines for stroke victims.

Wendy Alexander, Scotland's minister for enterprise and lifelong learning, said: "These awards are at the heart of our drive to commercialise our world-class science base."

Robert Crawford, chief executive of Scottish Enterprise, said: "Scotland has long had an international reputation for innovative thinking, but it is only recently that we have been able to match that with dynamic ways of commercialising."

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