Britain has been re-instated as a full member of the Gemini Observatory, meaning its astronomers can continue to use two of the world's best telescopes.
An £80m hole in the UK's physics and astronomy budget threatened to deny the scientists access to the 8m-class telescopes in Chile and Hawaii.
But administrators have now agreed to maintain the UK's subscription and recoup costs by selling observing time.
The upheaval has been a rollercoaster, one researcher told BBC News.
Membership of the Gemini consortium gives British astronomers direct access to two prime optical-infrared reflecting telescopes.
Gemini South and Gemini North are only now reaching their full potential after 15 years of development. With mirrors that measure 8.1m across, the facilities are capable of seeing some of the faintest and most distant objects in the Universe.
Having invested something like £70m in their development, the UK currently puts about £4m into the consortium each year to maintain these remarkable telescopes.
Researchers were therefore aghast when the Science and Technology Facilities Council (STFC), which looks after UK astronomy funding, announced its intention to negotiate a withdrawal from the Gemini consortium.
Erased partner
Its Gemini partners (which include the US, Canada, Chile, Australia, Brazil and Argentina)) were also upset by the decision and moved swiftly to throw the UK out. They even removed UK flags from observatory buildings and the UK's name from the consortium's website.
But the outrage expressed in the UK's astronomical community, followed by a review of the programme's scientific merit, resulted in a change of policy by STFC management; and the announcement of a desire to try to stay within the consortium.
Further discussion with Gemini partners led on Wednesday to a joint statement being issued confirming the UK's continued full membership of the observatory project.
It read: "The Science and Technology Facilities Council has reaffirmed the UK's position as a full member of the Partnership under the terms of the current Gemini Agreement. The Gemini Board welcomes this statement.
"The Board acknowledges the STFC's need to address its budgetary constraints and notes that, under the terms of the Agreement, the UK is entitled to seek to sell some of its telescope time both within the partnership and, subject to the approval of the Board, outside the current partnership."
Critics of the original decision to withdraw said the eventual outcome ought to have been the policy from the start. If the UK needed to save money, they argued, it should have sought to sell time on the telescopes - not abandon them.
Knock on
This is not the end of the matter, however. The consequences of the U-turn on Gemini could be grave for other areas of UK physics and astronomy.
The STFC will not now save the more than £15m it had hoped on the withdrawal exercise. With no extra funds coming from government, the council will have little choice but to take the money from other projects.
Where this squeeze will occur could become clearer next week when the STFC updates scientists on its budget position.
The Gemini rollercoaster:
The words "United Kingdom" were displayed once again on the Gemini website on Wednesday night.
Jonathan.Amos-INTERNET@bbc.co.uk
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