UPDATE 1-US judge refuses to lift ban on govt stem cell funds

(Adds byline, details from ruling)

By Jeremy Pelofsky

WASHINGTON, Sept 7 (Reuters) - A U.S. judge refused on Tuesday to lift a ban on federal funding of human embryonic stem cell research despite Obama administration warnings it would set back key research and cost more than a thousand jobs.

U.S. District Judge Royce Lamberth rejected the Obama administration's emergency request to lift his injunction while the government appeals his ruling that barred federal funding.

The administration was "incorrect about much of their 'parade of horribles' that will supposedly result from this court's preliminary injunction," Lamberth said in a brief order.

The Obama administration had told Lamberth scores of research projects involving hundreds of millions of dollars in federal funding were affected by his injunction and more than 1,300 jobs were at risk.

A Justice Department spokesman had no immediate comment. The Obama administration could file an appeal with the U.S. Court of Appeals for the District of Columbia Circuit and ask that it lift the injunction.

President Barack Obama opened the door to broader federal funding of human embryonic stem cell research as one of his first acts after taking office in 2009, overturning his predecessor George W. Bush's limitations on the work.

The National Institutes of Health issued guidelines for the research, which Dr. James Sherley, a biological engineer at Boston Biomedical Research Institute, and Theresa Deisher, of Washington-based AVM Biotechnology, then challenged.