Four months ago Britain enjoyed a priceless reputation, earned over many decades, as a world leader in pure physics. Not any more. Many of its university-based researchers now operate in fear of sudden withdrawal of the government grants on which they depend. Its reliability as a partner in the huge international projects that set the pace in cutting-edge physics is in serious jeopardy. And its credentials in the delicate business of administering publicly funded research have been subject to scalding criticism by Parliament.

This state of affairs is directly at odds with the Government's aim of making Britain “one of the best places in the world for science, research and innovation”. It is also unnecessary given the robust overall increase in science funding to which the Government has committed itself. But the explanation is clear: an ill-judged merger of two physics research councils last year has led to a series of disastrous decisions since then by the hybrid quango that this merger has produced. These decisions are rightly condemned today in a report by the House of Commons' Innovation, Universities, Science and Skills Committee. The damage done to physics in the country of Newton and Rutherford is not irreparable, but it will take swift action, at a high level, to reverse.

Our understanding of electrons, positrons and new planets at the edge of the known universe may not be of obvious or immediate benefit to the taxpayer. Yet pure physics, as the Astronomer Royal has observed, is “the basis for most of the technologies that modern life depends on”. It must be nurtured by any country that aspires to leadership of the global “knowledge economy”. Expertise in debt repackaging and hedge fund management is ephemeral by comparison, as recent trends have shown.

The Commons report traces the current crisis to the creation of the Science and Technology Facilities Council (STFC) by merging the bodies that until last year earmarked funds separately for research into partical physics and astronomy and for maintaining the country's big physics facilities. The STFC was saddled with a large inherited debt and future funding commitments that it could not meet. The result has been an £80 million budget shortfall, triggering abrupt cuts to university research grants and Britain's complete withdrawal last December from the International Linear Collider at Cern, the successor project to the 17-mile particle accelerator in which scientists hope to find the legendary Higgs Boson particle, starting later this year.

Had these cuts been based on scientific priority, after serious consultation and with full awareness of their impact on Britain's reputation, they might have been legitimate. Instead, the STFC appears to have sought the path of least bureaucratic resistance. In the process it has reneged on firm international commitments and shown Britain to be unreliable, at best, as a patron of large-scale science. That perception will hamper individual British scientists well into the future. It will also send precisely the wrong message to school pupils currently considering physics Alevels - and already discouraged by the chronic shortage of qualified teachers.

The Government is on firm ground when it emphasises “knowledge transfer” as the key to extracting prosperity from science. But without knowledge, there can be no transfer.