Scientists were today celebrating a "vote of confidence" after learning they had been spared swingeing cuts.
Months of campaigning by academics appeared to have paid off when it was revealed that the science budget would be frozen over the next four years.
Taking inflation into account, this amounts to a real-term reduction of less than 10%.
The research community had been bracing itself for cuts of up to 20% or more in Chancellor George Osborne's Comprehensive Spending Review (CSR).
Leading scientists warned that the results of such action would be catastrophic for British science and the UK economy.
Today they breathed a collective sigh of relief, while acknowledging that Britain still lagged behind its major competitors when it came to science funding.
In his speech, Mr Osborne announced that science cash funding would be protected at £4.6 billion.
He said: "Britain is a world leader in scientific research, and that is vital to our economic success."
The decision was warmly welcomed by leading members of the scientific community.
Leading neurobiologist Professor Colin Blakemore, from Oxford University, former head of the Medical Research Council, said: "It is wonderful to learn that Government has listened to the scientific community.
"Collectively we have made the case that funding science is not a cost but a way to invest in creating a stronger economy which is the best way to guarantee the recovery that will benefit everyone. It will now be important to maintain the dialogue with Government as it reviews budgetary commitments for the future."
Gail Cardew, head of programmes at the Royal Institution, said: "It is encouraging that the science budget will be maintained, given the critical role that research and innovation will play in the UK's economic recovery over the next decade. While it is still a cut in real terms, this decision is a significant vote of confidence in the UK's scientific community and the contribution it makes."
Professor Peter Weissberg, medical director of the British Heart Foundation, said: "Immediate reaction? Relief that science has been spared the deepest of cuts. Followed swiftly by the realisation that even at about 10% down, we'll be playing catch-up in an international field which could see UK science left behind."
He pointed out that charities were likely to come under greater pressure to fund more medical research.
Tough decisions remain to be taken on how the available funds will be allocated.
The Government distributes science money among the seven research councils, which in turn hand out grants to deserving scientists and institutions.
It is likely the share-out will favour areas expected to deliver wealth creation and promote a low carbon economy.
One casualty could be "Big Science", overseen by the Science and Technology Facilities Council (STFC).
The STFC funds large facilities such as the Diamond Light Source synchrotron facility in Oxfordshire, astronomy programmes, and Britain's involvement in the Large Hadron Collider (LHC).