Could it be true, people wondered, that the minister really wanted an improbably-proportioned, imaginary character from a rather violent computer game to be seen as our representative on the world stage? Indeed he did. As he told the Social Market Foundation, "We need... to build up knowledge among trading partners of contemporary British high-tech achievements".
Lara Croft is probably the fourth best-known female ever produced by Britain; the Tomb Raider game in which she appears has sold around 10 million copies throughout the world. The approach of a new version at Christmas caused much excitement among her followers.
The most famous female from Britain? Diana, Princess of Wales.
The second? Margaret Thatcher - a scientist by training, who caused an upheaval in the world of science in Britain, though few approved at the time of her policies.
And the third most famous female? Dolly the sheep - the first adult mammal clone, produced from a cell taken from a mature sheep's udder - has achieved fame that outstrips even Ms Croft's. However, sheep make poor ambassadors and right now, British science needs icons with an aggressive appearance, rather than a sheepish look.
The reason was set out in a speech by Peter Mandelson, the Secretary of State for Trade and Industry, who told the CBI Conference: "We are entering the era of the knowledge-driven economy. It's not some far-distant dream. It is here. Knowledge is the source of competitive advantage. Brain power is more important than brawn; intelligence more powerful than energy... we live in an age of discovery and creativity."
Today, he pointed out, the UK has one per cent of the world's population; yet it produces around 6 per cent of its science. "It would be a tragedy to waste this national treasure."
Certainly, Britain does get more scientific "bangs for its buck" than any other country. That was made clear by Sir Robert May, the Government's chief scientist, who recently performed a careful piece of research which showed two interesting facts. First, of the dozen high-tech nations (including the US and Japan) which account for 80 per cent of the world's total investment in research and development, the UK was among the bottom four in terms of its science spending relative to gross domestic product (the measure of "things" that a country makes, rather than financial services); it also was alone in showing a drop in the percentage of national wealth invested in research since 1981.
Second, when relative investment in basic research was compared with output of research papers, the United Kingdom came out top: in 1996 for every pounds 1million spent, British scientists produced 18.8 published papers, ahead of the US and Germany and especially Japan, which came bottom of the league with just 4.25 papers for every pounds 1million spent.
"We haven't been backing science as strongly as it deserves," Lord Sainsbury noted. "Or, indeed, as we should in terms of our economic interests."
For while Britain is "efficient" at producing science, there are some who argue that efficiency has only been won at a cost. The 1980s saw tremendous changes in the way British scientists thought of themselves and their work. The financial policies of the Conservative government emphasised "value for money". Researchers had to justify the time they spent on work; in many cases, academic contracts were altered from open-ended ones to short-term ones lasting as little as six months. Many researchers at the lower end of the pay scale became disaffected with academic life and moved into business - a result the government at the time was not opposed to.
It was no accident that 12 years ago the pressure group "Save British Science" (SBS) was formed, aiming to highlight issues ranging from outdated equipment in universities to the brain-drain of talent to America.
But the Conservative administration tended not to listen to SBS. Instead, it continued to squeeze funding, particularly on "blue skies" research. This field - so called because the researchers were portrayed as gazing into the sky, waiting for inspiration to strike - has in the past been one of Britain's most successful areas of science.
But the problem with it, in the view of sending review managers in the 1980s, was that there was no way to show that it generated any revenue. What use is there, they would ask, in wondering about the sort of chemicals that might exist in a distant star? It's not as if we will ever be able to get there; so, the arguments went, funding for such uncompetitive fields should be cut, and switched towards "applied" research which companies would invest in.
Yet scientists have often maintained there is no clear dividing line between "pure" research (as they prefer to call "blue skies" projects) and "applied". It is a continuum, in which an idea with the most unearthly origin can find an application right here.
One of the best examples is "buckyballs" - a form of carbon that normally only exists in gas clouds in distant parts of galaxies. Unlike the carbon we normally find on Earth, "buckyballs" are molecules containing 60 carbon atoms, linked to each other in an interlocking pattern of hexagons and pentagons which exactly resembles a football.
Buckyballs were discovered by a team including Sir Harold Kroto, now professor of chemistry at the University of Sussex, when they were pondering what sort of carbon molecules could be formed in supernovas. In 1985, analysing the spectra from those exploding stars, they discovered a spike indicating a molecule which must consist of 60 carbon atoms. A feverish attempt to model it followed, involving jelly babies (as the carbon atoms) and cocktail sticks (for the rigid bonds between them). Eventually, the team cracked it. Kroto was jointly awarded the 1996 Nobel Prize for Chemistry - but when he won the prize, he pointed out that the astronomy work had to be done in Canada, because the right facilities didn't then exist in Britain; and that he had done the rest of the work in the United States. On the day his Nobel award was announced, he was turned down for funding on a chemistry research project.
Now, two years later, he is still unsure whether scientists can ever persuade politicians and businesses to invest in basic research. The interests of the two sides are at cross-purposes, he thinks: "Science is creative, and that's how we, as people, work. I've never made a discovery by saying to myself, `Today I must do something important'. But some of this research may only pay off in 100 years. That's no use to a government which could be out of office in five years. Politicians need results they can show the public."
Buckyballs are in fact finding applications on Earth. Like diamonds (which are endlessly repeated pyramids of carbon atoms), buckyballs are very strong; experiments are now underway to develop tubes of the linked atoms in order to produce strong, cheap conductors. It hasn't happened yet, but within the next decade it could be a reality.
Britain's forte though is in biotechnology. It was, after all, the cradle for the explosive interest in the unlocking of the genetic code, following the groundbreaking work of Francis Crick and James Watson (and, it should be noted, Rosalind Franklin) in working out the double helix structure of DNA at Cambridge University in 1953.
Britain is now the world's second most successful biotechnology venue, behind only the United States, where the population is far greater and the access to venture capital - essential to starting up businesses whose success is not guaranteed - far easier. We have about 40 per cent of Europe's bioindustry.
Dolly the sheep is just one example of the application of biotechnology, and marks another example of how someone sitting in a laboratory, thinking about an issue, can come up with a world-beating idea. At the Government- funded Roslin Institute in Edinburgh, the scientists were working on a system to add an extra gene to sheep. The gene carries the code to make a protein, alpha anti-trypsin, which may be useful for treating cystic fibrosis. If they added the gene to the correct part of the sheep's DNA, the protein would be secreted in the animal's milk, and could be separated out.
But to produce a herd of such sheep, and generations of them, would require producing both males and females with the extra gene - because mating with a male without the gene could mean that the valuable addition was not passed on to the lamb. That would mean many thousands of pounds wasted, just because of the random action of reproductive genetics.
The ideal would be to produce sheep which were identical. But that would mean cloning - and that had never been achieved in mammals before. Graham Bulfield at the institute read up the research on cloning, most of which involved frogs and was not encouraging, and then began to experiment. After many false starts and disappointments, Dolly was born in late 1996 - though her existence was kept secret while patents were filed and the research written up for scientific publication. Together, that meant that PPL, the spin-off company from Roslin, could exploit the work, potentially worth millions in export earnings for Britain.
The delay for patents marks a key way in which scientists today have become aware that the competitive environment has changed. Where a few years ago they would be wary of talking to outsiders about their work because of fears that others might copy it, they are doubly so now when patents are at stake. Unravelling the sequence of a gene or developing a technique for manipulating cells, as Bulfield did, is one of the most valuable processes in the world today. Everyone has learned the lesson of the mistake made by the Medical Research Council, which funded the research that led to the development of monoclonal antibodies - used for cancer diagnosis, tests and treatment - but did not patent them. Nowadays, they are a huge business worldwide; the MRC could have offered the technology for a tiny licence and cashed in. Instead it got nothing. The MRC has learnt from its mistake too, and in 1996 launched a venture capital fund aiming to reap the rewards of spin-offs from research work that it funds.
Scientists today do have a list of discoveries made by Britain and exploited elsewhere, which they can consult if they want to be depressed: besides monoclonal antibodies there is amorphous silicon (which could be the key to cheap and effective solar panels), and magnetic resonance imaging, widely used in medicine. But there are many other things to be encouraged by: the breast cancer genes BRCA1 and BRCA2, jointly discovered by the Cancer Research Campaign, and the development of the anti-impotence drug Viagra (by scientists at Pfizer's laboratories in Sandwich, Kent). Meanwhile the small town of Hinxton, Cambridge, is the focus of an international effort to unravel the 100,000 or so genes contained in the typical human's DNA - known as the "Human Genome Project". Its aim is to complete its work soon after the millennium, identifying roughly one-third of the genes that help to make us what we are. Back in Cambridge itself, the world's biggest software company, Microsoft, has invested millions of pounds to set up a software research centre specifically because of the expertise of Roger Needham, a computer sciences expert who helped to develop some of the earliest multi-user computer operating systems and encryption techniques.
Lord Sainsbury says such foci offer a real chance to derive national competitive advantage. "Such clusters of firms provide - once a critical mass has been established - for the growth and transfer of skills and knowledge within the sector."
There are other ways in which Britain's best-known scientists act as ambassadors for the subject around the world: Stephen Hawking, the Lucasian professor of mathematics at the Cambridge University, is world-famous for his work on the theory of black holes (which has earned him the unique accolades of guest appearances in both Star Trek and The Simpsons). Richard Dawkins has publicised the theory of evolution with a vigour that might have surprised even Charles Darwin - mention the "selfish gene" to explain behaviour, and you are almost certainly thinking of his work.
But what of the wider picture of British science? The pressure group Save British Science is still going, but it seems unsure of its position. Earlier this month it was addressed by the Conservative MP John Redwood, who never seemed a friend of calls for more funding when in office.
Generally, the mood among scientists suggests that the Labour administration is viewed with more approval than its predecessor. The announcement in the Comprehensive Spending Review of a joint funding package with the Wellcome Trust, to increase science funding by pounds 1.4billion over three years, will boost the science budget in 2001 by about 15 per cent above this year's level. The Government's input will rise from pounds 1.34bn to pounds 1.66bn over the three years. Of that, pounds 600m will be aimed at bringing university laboratories up to date. There was also an increase in the stipend for postgraduate students, by pounds 1,000.
And where does Lara Croft fit into all this? The point that Lord Sainsbury wanted to make was that when people think of science in Britain, too many think only of our science and technology heritage, rather than the science of the present: "We invented the steam engine, the jet engine, the hovercraft. The names of Newton, Darwin and Faraday are known worldwide. Our promotional activities tend to cement this view by plumping for the safe option."
But consider Lara Croft (the result of state-of-the-art programming) and Dolly, and the whole panoply of modern developments now going on in British science, and it's clear that to judge what's going on by those older names is like driving by looking in the rear-view mirror. And in the country which developed the Thrust supersonic car - the land-speed record holder, defeating an American contender - that's the wrong way to drive.