The move was announced at a meeting in London yesterday between the Foreign Secretary Robin Cook, George Robertson the Defence Secretary and Kofi Annan, the UN Secretary General.
Under the agreement, Britain will be putting up to 8,000 men on permanent standby for the UN. They will be front-line, rapid-reaction forces, backed by aircraft and communications, engineering and command-and-control units.
The two British ministers underlined that Britain retained the right to refuse to take part in particular operations, and that the force would not be part of a permanent army under United Nations control.
In future a peacekeeping operation will be able to be mounted far more speedily - offering a chance of averting catastrophes like the 1994 Rwanda genocide, where swift and resolute action by a small force might have prevented the deaths of some 800,000 people.
The move is being presented as new evidence of closer Anglo-French defence co-operation, building on the understanding reached at the St Malo summit last December. It is also in line with the conclusions of the 1998 Strategic Defence Review, shifting post-Cold War defence priorities from guarding national security to the development of flexible armed forces, giving Britain the ability to intervene far from its shores.
But Conservatives accused the Government of increasing the burden on Britain's already-overstretched military, while Menzies Campbell, the Liberal Democrat defence spokesman said that Labour would have to increase defence spending.
"The present numbers are inadequate. We've had the peace dividend, and now it's time for some investment," Mr Campbell declared.