Chancellor Gordon Brown has launched a consultation document on a 10-year investment strategy for science and engineering in the United Kingdom.
Mr Brown believes it is an exciting time for science
Speaking to senior industry figures, he pledged to protect the increases he announced in the last Spending Review.
These increases will lift spending on the science sector to £3bn by 2005-6.
The consultation sets out the aims of the 10-year framework which include making Britain one of the world's most attractive places to do science.
Mr Brown launched the document at a National Science Week event at No 11 Downing Street on Tuesday.
"To prepare for the challenges of a more competitive global economy, a budget for a Britain of stability and strength has to be a budget for investment and science," Mr Brown said.
"Faced with the challenge from America, Japan and the euro area, and witnessing the rise of India and China... we, in Britain, cannot afford not to invest."
The chancellor said the government's priorities for science and innovation over the next 10 years included greater collaboration between universities and business to provide a sharper focus for research.
SCIENCE POLICY STRATEGY
The Council of Science and Technology advises the Prime Minister and the First Ministers for Scotland and Wales
Other priorities included a better application of cutting edge technologies in business and the public sector and promoting a dynamic research base that met the needs of both public and private funders, he added.
Listening to Mr Brown were the newly appointed members of the recently relaunched Council for Science and Technology which advises the government on science and technology policy issues.
Commenting on the launch, Lord May of Oxford, president of the Royal Society, the UK's academy of science, said: "It is good news that the government is looking beyond the immediate political priorities for science and innovation.
"The only cloud on the horizon remains the threat of an ever-expanding bureaucracy for our researchers when they should be concentrating on having good ideas."
The government is already holding talks with companies, including GlaxoSmithkline, AstraZeneca, Shell and Rolls Royce, on how their commercial investment in research and development could be partnered with public investment in the UK science base.
The consultation follows the announcement of the 10-year strategy earlier in March and will end on 30 April 2004.
From schools through to industry - the UK needs more science
AstraZeneca's chief executive, Sir Tom McKillop, has been advising on the strategy. He told the BBC the UK lagged behind many of its global rivals, particularly the US.
"Currently it is estimated there are about half a million of Europe's leading scientists working in the US," he said.
"We've got to reverse that brain drain. We've got to have our best brains engaged in the teaching of science and the application of science."
He added: "We have to seize these opportunities to help shape policy. The final test will be to see the UK competing even more successfully in high-value economic activities."