Stadnik, bottom, was defeat by Russia's Lorisa Oorzhak in the final
Britain's Yana Stadnik took women's 48kg freestyle silver at the European Championships in Baku on Saturday.
The achievement has been hailed as "a fantastic result for British wrestling" by the sport's UK governing body.
Ukraine-born Stadnik, 22, who arrived in Britain in February 2007, was beaten to the gold by Russia's Lorisa Oorzhak.
"Yana is coming on in leaps and bounds. This result really does establish her in the world's top four," said GB performance director Shaun Morley.
British wrestling has struggled in recent years, especially following deep funding cuts imposed on a number of sports by funding body UK Sport in January of last year.
Yana is going to be a real contender for a medal at the London Olympics
GB wrestling performance director
But, since arriving in Britain, Stadnik has rapidly developed into the figurehead of the women's team, narrowly missing a bronze medal at the World Championships in Denmark.
"The result proves the progress we are making with our wrestlers, that they are not only competitive at the top level but also winning medals," added Morley.
"On this evidence, Yana is going to be a real contender for a medal at the London Olympics."
Britain last won a wrestling medal at the Los Angeles Games in 1984, where Noel Loban earned bronze.
Stadnik initially arrived in the UK as a sparring partner, but was persuaded to stay with the British team in Manchester.
At the time, she said: "I love it here. I love Manchester, I love the lifestyle, and I really do want to settle here and become British.
"Everyone has made me so welcome, and what impressed me were the standards, which I can see improving all the time, and that is helping me."
Her brother, Andrei Stadnik, won Olympic silver in the men's 66kg freestyle wrestling at the Beijing Games in 2008, representing Ukraine.
Britain sent a team of six wrestlers to the 2010 European Championships, held in the capital of Azerbaijan.