It sounds like classic sci-fi material. In one end of the future pet shop are shimmering fish lighting up a dark corner thanks to implanted genes that make them glow. At the other end are mournful cat owners queuing to bring their elderly animals for DNA extraction and eventual cloning, writes Jim Colgan

And between them, are cages of excited puppies snapping their mouths in silence since they were born unable to bark.

Though it seems far-fetched, much of this kind of genetic modification in pets is already a reality in the US and Asia. But as more imaginative modifications become a reality, opponents are raising questions about the ethics involved and the means of regulation. And as initial sales reports are less than enthusiastic, analysts wonder if the novelty factor is enough to drive demand.

Advances in genetic engineering have already given rise to entire industries in the food and medical fields, but recent technological milestones have led to speculation that a fully-fledged business in modified pets is within sight.

Last month, US consumers saw the first "transgenic" fish reach the retail pet market. Branded the GloFish, the new pet is a genetically altered tropical fish that glows in the dark.

Meanwhile, another US company is testing the market in a personal cat-cloning service. California-based Genetic Savings and Clone is taking orders to reproduce cats, genetically identical to current or dying ones.

The company currently accepts cell samples from terminally ill or recently deceased cats into a "gene bank" for later cloning.

These recent events are raising questions about how far companies are willing to go to create new markets in pet sales using genetics.

Some experts believe the ethics of altering animals for human amusement raises too many issues for public marketing and critics fear the regulatory process is too outmoded to assess properly the impact on the environment.

"This debate is in its infancy," says Mr Art Caplan, a professor in bioethics at the University of Pennsylvania. Caplan believes widespread discussion about the implications of genetically modified animals has yet to take root and he expects there will be an eventual public backlash.

"But if people have the money and they want to do this, I'm not going to say it should be outlawed," he says.

In fact, many established scientists support the advances made so far and note it is already taking place with no apparent problems.

The GloFish is the first and only transgenic pet to be sold in the United States so far and it generated intense public interest when the company announced its sale last November.

Scientists developed the fish in East Asia, where it is also sold, by inserting a sea anemone gene into the egg of a common zebra fish, a tropical fish found in many household aquariums.

Texas-based Yorktown Technologies owns the exclusive rights to US sales and the company says the fish was originally designed to detect pollution levels in water.

"We saw the fish, we thought it was beautiful and we wanted to share it with the public," says Yorktown chief executive Mr Alan Blake.

Concerns over transgenic animals - such as the GloFish - range from ecological effects, should they be released in the local environment, and the effect if eaten by humans. But tropical fish cannot survive in domestic US waters and scientists say there is no fear of the GloFish affecting the human food chain.

"Not only should people not eat our fish, we tell them they shouldn't eat zebra fish, or any other ornamental fish for that matter," Blake says.

In fact, Blake cites a number of established molecular geneticists to back up his claim of safety while the US Food and Drug Administration, the agency typically charged with overseeing such animals, opted not to regulate the GloFish after a review last year. But despite the lack of scientific evidence pointing to any danger with this animal, some critics express concern at the precedent set by the lack of federal scrutiny.

"It was regulation by default," says Dr Patrick Gibbs, a fish geneticist at the University of Miami in Florida, who intends to develop his own transgenic fish.

Gibbs explains that the FDA's decision not to regulate was because it decided that because such fish are not used as food "they pose no threat to the food supply". But he says this ignores a concern he raises about the nature of the extra material in the fish genes.

"The regulators are behind science, they move at a snail's pace," says Mr Craig Culp, a spokesman for the Centre for Food Safety, an anti-GM organisation based in Washington which filed a lawsuit against the FDA over the GloFish.

Culp says the suit's main concern is human consumption, but he also opposes the fish on ethical grounds. "Someone might decide to genetically engineer an animal that's half cat and half dog," he says. "The front end meets and greets you while the back end uses the litter box."

While the FDA stood out of Yorktown's way, California regulators blocked statewide sales of the GloFish. While declaring the fish was scientifically sound, the State opposed it on ethical grounds. This contrasts with Miami's Gibbs who believes the process is okay in principle.

"There's nothing wrong with making a new kind of pet, especially if it's not quite so gimmicky," he says. "But you have to have more controls on it."

Since its release, the GloFish has been treated as a testing ground for genetically engineered animals as household pets, but there are similar developments on the horizon.

Two years ago, a US-based company, Transgenic Pets of Syracuse, started developing a cloned cat that would eliminate the protein that causes allergic reactions in humans. If completed, the alteration would be more functional than actions like changing the colour of fish, and it might be easier to argue on ethical grounds.

"To me, you could do something better that's non-trivial," Gibbs says. "Look at chickens. Maybe you could make them resistant to the Avian Flu."

Though genetic engineering for drugs and food is tightly controlled, the GloFish treatment shows a more hands-off approach to altered pets.

But experts predict this will change if engineered dogs and cats are involved. Public resistance, and tougher regulation, might result, some scientists say, if you were to propose altering the features of a dog to accommodate consumer demand.

But as the debate over genetically altered pets progresses, in the absence of regulation, the public may vote with its pocket book. And so far initial report on GloFish sales have been flat at pet stores nationwide.