Chief medical officer Sir Kenneth Calman announced the creation of a working party to study how best to treat the condition.
Myalgic encephalomyelitis, rarely heard of until the mid-80s, has been the centre of doubt and controversy for a decade with some scientists convinced the condition does not exist.
Growing recognition
Now more commonly known as Chronic Fatigue Syndrome, ME has gained growing recognition amid claims that there are about 150,000 sufferers in the UK.
Sir Kenneth's decision was welcomed by the ME Association, which called for immediate action to improve diagnosis and treatment.
Speaking at the Royal College of Physicians, Sir Kenneth said: "CFS/ME is a real entity. It's distressing, it's debilitating, and it affects a large number of people.
"It poses therefore a significant challenge to the medical professions and, because it's a problem for individuals, it's a problem too for the community."
"I am convinced there is a universally recognised need for the drawing up of advice and information on aspects of clinical care and case management, and for that reason I am convening a working group on clinical practice and management."
Affects all ages
The illness, also known as post-viral fatigue syndrome, can affect all ages, though onset often occurs between the ages of 20 and 40.
People with CFS/ME suffer overwhelming fatigue, flu-like symptoms, painful muscles and aching joints, and swollen glands.
The condition can last for years and in severe cases leave the victim bedridden.
Last year a survey indicated it was now the most common cause of long-term sickness absence from school.
High-profile sufferers have included yachtswoman and writer Claire Francis,
the Duchess of Kent, and Emily Wilcox, the eldest daughter of Esther Rantzen and her husband Desmond Wilcox.
High powered backing
The Linbury Trust, one of the Sainsbury family charitable trusts and the UK's foremost supporter of medical research into ME, has agreed to support the government's working group.
The trust said it hoped the work it had backed could be taken forward by larger funding bodies like the Medical Research Council.
Sir Kenneth's announcement came at the launch of a book by the Linbury Trust on ME research, which it has spent £4 million over eight years "pump priming"
It set up a scientific advisory panel with the remit of developing a research strategy.
"Much has been learned but there is a very long way still to go before our knowledge about CFS is remotely adequate to help put in place effective treatments," said a Linbury Trust spokeswoman.
Action needed
An ME Association spokeswoman said: "Despite the fact that the Department of Health does now recognise ME/CFS to be a genuine and disabling illness, the ME Association believes that action must now be taken to address our concerns."
The association claimed: