The Heritage Lottery Fund has decided to award £11.5m to the National Gallery to help it bid to keep a Raphael painting in the UK.
The painting is thought to have been completed in Florence in about 1507-8
The Madonna and Child, also known as Madonna of the Pinks, has been loaned to the gallery by the Duke of Northumberland since 1992.
The duke had agreed to sell the work, which measures just 11.4 inches by 9 inches, to the J Paul Getty Museum in California, for a reported £29m.
But the National Gallery mounted a campaign to keep it in the UK, and earlier this year the UK Government allowed a temporary ban on granting the work an export licence.
Now the Heritage Lottery Fund has decided to give the gallery £11.5m to help it try to keep the painting in the UK.
The gallery now needs to raise £9.5m itself to present a "matching bid" of £21m to Culture Secretary Tessa Jowell, whose department will have the final say on the whether the painting leaves the UK.
The fund's chair, Liz Forgan, said: "This was a once-and-for-all opportunity to keep the Madonna in Britain and strengthen a great national collection, an opportunity we felt could not be missed.
"I know there is some debate about whether this Raphael is his finest or not, but without any doubt we are dealing here with a fine picture. Raphael is in the very top league of European masters.
"Of course the Getty is a great public gallery, but America is a little more distanced for us Britons than Trafalgar Square."
But Ms Forgan, while praising the gallery's bid for the Madonna, criticised it for being so dependent on the fund.
Her board turned down a separate application to fund the redevelopment of its front entrance.
The gallery had originally been seeking £20m from the fund but revised its request after seeking advice on tax laws.
The National Gallery has had the painting since 1992
Funds to top up the grant have so far been raised through donations made by visitors to the gallery, as well as private donations, and a grant of £400,000 from the National Art Collections Fund (NACF).
NACF chairman Brian Allen said: "This jewel of a picture is now within the National Gallery's reach, and we really hope that the gallery's matching offer is accepted."
The painting is considered to be one of the most cherished small images of the Madonna and the Christ Child from the Italian Renaissance.
It is thought to have been completed in Florence in about 1507-8, just before Raphael left to start work in Rome.
The ban on exporting the picture runs out on 27 August, when a government minister will grant a licence unless enough money has been raised to keep it in Britain.
Natural History Museum
St Martin-in-the-Fields, London
Wentworth Castle, Barnsley
London's Transport Museum
Royal Observatory, Greenwich
Kibble Palace, Glasgow
Severn Valley Railway
Brading Roman Villa,
Isle of Wight £2.13m
The Duke's home at Alnwick Castle plays host to thousands of visitors each year, and the duke has maintained that wherever the Raphael goes, funds from the sale will help maintain UK heritage.
A spokesman for him said: "Today's decision doesn't really affect us yet until we get a formal offer from the gallery or another British institution.
"The key for us is that whoever buys it, the money will go towards restoring the rest of the collection at Alnwick and the 200 listed buildings the duke has under his custodianship."
Other grants were also announced on Wednesday, including £14.9m for the Natural History Museum's pressed plant and insect collection, £10.35m for Wentworth Castle near Barnsley and a £9.47m grant to upgrade part of the old Covent Garden flower market, to benefit London's Transport Museum.