If these can be grown into fully developed sperm, which the researchers hope to do within five years, they may be useful in fertility treatments and in treatment for cancer patients left sterile by chemotherapy.
Proposed new laws would ban their use in fertility treatments in the UK and experts have warned the findings from the German study should be interpreted with caution at this very early stage.
The technique, which could be adapted to help female infertility by growing eggs in a lab, would also raise the prospect of children being born through entirely artificial means. If the technology were abused, men could be completely sidelined.
The Department of Health said plans to ban the use of artificial sperm and eggs in fertility treatment was supported by many organisations and the British Medical Association.