A huge review of UK academic research has found that 54% of the work assessed in 159 universities was "world leading" or "internationally excellent".
The 67 expert Research Assessment Exercise (RAE) panels said that another 33% was "internationally recognised".
The results will decide universities' shares of more than £1.5bn, a third of the available research funding.
But the funding council has had to defend the way institutions could choose which staff would be assessed.
The results give no indication what proportion of staff in any area were put forward.
"Universities were selective in their strategies for submission," said David Eastwood, chief executive of the Higher Education Funding Council for England (Hefce), which co-ordinated the UK-wide exercise.
The RAE was last conducted in 2001 though in a different form - so comparisons between the results then and now are not readily possible.
'No cosiness'
The expert panels included international members and representatives from research users such as pharmaceutical companies.
They reviewed 220,000 separate research "outputs" - from the purely academic to the highly applied in everything from cutting edge bio-medical research to art therapy, much of it multi-disciplinary.
Those involved insist this was done with great rigour and no "cosiness" and followed strict calibration procedures to ensure that very different work was assessed equally.
They have produced "profiles" for each subject, showing the proportion of submissions from each institution that fell into five different grades:
The effort cost the funding councils at least £12m. Consultants are calculating the indirect cost to universities.
Prof Eastwood told a news conference in London: "This represents an outstanding achievement, confirming that the UK is among the top rank of research powers in the world."
Formula
But the absence of data on staff numbers as a result of quibbles about Hefce's guidance on who was eligible has cast doubt on the results.
The numbers will have implications for the funding. It will be shared using a formula that gives priority to research quality and "volume" - how many submissions were involved. The more high quality submissions there were, the higher the funding.
But Hefce is only now beginning work on the funding formula, and institutions' allocations will not be announced until the beginning of March.
Not surprisingly any rankings are dominated by the research-intensive universities belonging to the Russell Group or the 1994 Group.
Cambridge had 71% of submissions rated 4* and 3*, while Oxford had 70% - but that covered a slightly larger number of staff.
Imperial College London had 73% in the top two grades though with a smaller proportion rated 4*.
Its rector, Sir Roy Anderson, said: "Today's results demonstrate again the value of selective funding, where resources flow to the highest quality research areas.
"The fact that the UK has four universities judged to be in the world's top 10 is no accident.
"The UK's top universities already punch well beyond their weight. Only by investing in this excellence will the UK maintain a globally competitive edge."
But the RAE also - by design - exposes pockets of excellence.
The university rated as having the greatest cluster of world-leading researchers of any discipline in any university in the UK is Leicester.
It had 65% of its staff rated 4* and 30% 3* - in museum studies.
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