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The child, who was from Romania, was injected in the brain with stem cells but suffered internal bleeding.
Three months earlier, a boy aged 10 from Azerbaijan had almost died when the same procedure went wrong.
The centre had previously had permission to practice for a transitional period because it was already up and running when a law came into force in 2009 banning the commercial exploitation of unproven stem cell treatments.
It appears German authorities have now decided to close the loophole with immediate effect.
The clinic did not appear to offer up its claims to independent scrutiny while experts suggested any improvement in condition reported by patients after treatment could be caused by the placebo effect.
A doctor at the clinic told a Sunday Telegraph undercover reporter, who suffers from multiple sclerosis and is confined to a wheelchair, that he might walk again should he agree to the stem cell treatments.
Raising the £15,000 needed for his treatment, she telephoned the XCell the following day only to be told the clinic was no longer accepting patients.
The Sunday Telegraph now understands that following this newspaper's report in October, German authorities decided to re-examine the legality of the XCell operation.Regretfully for this reason, we must cancel your appointment until further notice.We will notify you for further updates about the matter." The clinic had come under increasing scrutiny following the death of an 18-month-old boy in August last year, in a case first revealed by The Sunday Telegraph.The clinic used modern equipment and claimed great success for its treatments although it was always careful not to offer guarantees of cures to patients.The treatment involved taking bone marrow from patients, harvesting stem cells from the bone marrow and then reinjecting those stem cells into other parts of the body.
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However we welcome the news that the XCell-Center is not accepting any more cases." Ira Hermann, who runs the German stem cell network which funds scientific research projects, said: "XCell was offering unproven treatments and taking a lot of money from very vulnerable people." Professor Chris Mason, chair of regenerative medicine at University College London, said: "This is excellent news for the European cell therapy industry.