Security spending will rise by more than half a billion pounds to combat the UK's increased terrorist threat, since the 11 September attacks.
Extra funding will cover counter-terrorism measures
It will go up to £1.5bn this year and £2.1bn in 2007/8, Chancellor Gordon Brown told MPs in his spending review.
The 10% increase will go on modernising border control and radio communication, on counter-terrorism and on nuclear and chemical decontamination plans.
One thousand extra intelligence staff will also be employed, he said.
The increases follow a detailed review of the country's security needs under Home Secretary David Blunkett.
Announcing the figures, Mr Brown said: "Since the tragic events of 11 September, the needs of national security at home and action against terrorism abroad have rightly assumed a new and heightened importance.
"Recent events demand we strengthen not just our national security - our capacity to prevent terrorist incidents - but also our national resilience - our capacity to respond.
Security spending was £950m in 2001, before the terrorist attacks on the World Trade Center and other US targets.
Public sector job cuts and savings will make would make £21.5 billion available for the priorities of security, technology and education and public services, Mr Brown told the Commons.
The spending plans come as an MI5 report was expected to call for radical security changes to protect the Palace of Westminster.
Security chiefs are likely to propose a new steel barrier around parliament, replacing concrete blocks, thought to be dangerous if blown up.
For the first time security costs and responsibilities are covered together in the spending review.
A new framework of civil protection will replace the old civil defence system and the local authority emergency planning budget will be doubled, the Chancellor said.
A budget increase for Foreign Secretary Jack Straw from £1.5bn this year to £1.6bn in 2007-8 was also outlined.
It would address the increased risk for overseas embassy staff and the greater importance of international diplomacy, Mr Brown said.
The security spending increases are part of a £61bn rise in total government departmental spending to £340bn in 2007/8.