Jodrell Bank, Britain’s window on the stars, has been saved from closure and is to keep searching for answers to Man’s place in the Universe.

The future of the institution was secured with an agreement to reinstate funding for e-Merlin, the observatory’s key research project.

The Science and Technology Facilities Council had planned to cut money for e-Merlin but reversed its decision after The Times revealed that it would mean the closure of the Jodrell Bank Observatory.

Funding has now been promised to cover the £2.5 million annual operating costs for the next three years and the deal means that Jodrell will play a leading role in astronomy for at least the next decade.

Times Archive, 1952: Largest radio telescope

Unexplored regions of the universe will be opened to astronomers when the world's largest radio telescope is completed at Jodrell Bank in Cheshire

• Jodrell Bank telescope nearing completion

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Professor Sir Bernard Lovell, who was in charge of the radio telescope dish when it tracked the first Sputnik satellite 51 years ago, said: “It’s wonderful news. Jodrell can now continue at full steam. I’m delighted.

“I think it’s tremendously important. The telescope is part of e-Merlin, which is a vital programme. It’s of tremendous cosmological importance.”

Agreement over e-Merlin, which is designed to help scientists to learn how stars and galaxies evolved, assures Jodrell’s immediate future and in the longer term it will be secured by involvement in the Square Kilometre Array project.

The observatory is regarded as a cultural icon and the threat to force its closure by cutting e-Merlin funding caused a public outcry. Its giant radio-telescope has played an important role in helping scientists to understand how the Universe works and it has kept British researchers at the fore-front of the field.

Among the most important discoveries by researchers at Jodrell were insights into pulsars and gravitational lenses, and the most accurate proof yet of Einstein’s Theory of Relativity.

In a statement the University of Manchester, which runs the observatory, said: “The University of Manchester has reached an agreement with the Science and Technology Facilities Council that should secure the medium and long-term future of the famous Jodrell Bank Observatory in Cheshire.”

Professor Phil Diamond, the director of Jodrell, said he was delighted by the decision to keep the observatory open. The agreement had been reached after several weeks of intensive negotiations between the university and the facilities council.

He said: “They have solved the immediate problem and put us in a good position to discuss and plan for the longer term – hopefully without any funding crises on the horizon.”

Professor Diamond added: “I would like to say thank you to The Times and the public out there. I think everybody has been amazed at the public response.”

Before changing its mind about funding e-Merlin the facilities council ordered an independent review of the project that concluded that it was likely to be at the cutting edge of radio astronomy and certain to make important discoveries. Professor Diamond said that the independent panel had played a crucial role and he was pleased that the council had now agreed to form and consult such panels before making funding decisions in the future.

The e-Merlin project, an upgrade of the Merlin project, has already cost £8 million – money that would have gone to waste if the facilities council had refused to cover operating costs. Crucial electronic systems will now be introduced in August and its network of seven radiotelescopes across the UK, including the Lovell telescope, should go live in the autumn. Scientific findings are expected to begin being made next year.

Professor Diamond added that e-Merlin now had some key goals set for it. “It’s really going to help us understand the physics and how stars form and evolve. It’s going to do fantastic work looking back in time in the Universe to try to understand how galaxies like ours evolve. Part of its purpose is understanding our place in the Universe.”

Fifty years of scanning the skies

1957 The site’s 16-metre mark1 radio telescope becomes operational in time to track latter stages of the Soviet Union’s Sputnik 1 flight, the first satellite into Earth’s orbit

1958 The US Air Force enlists its help with plans for flight to the Moon

1959 First pictures transmitted from the far side of the Moon received by Jodrell Bank

1960s Plays important role as early-warning system against ballistic missile attack

1979 Instrumental in discovery of “gravitational lenses”, first predicted by Albert Einstein

1987 Renamed the Lovell telescope after its creator, Sir Bernard Lovell

1992 Part of a new national facility, open to all astronomers

1993 The Lovell Telescope searches for Nasa’s lost Mars Observer spacecraft

2008 The Times reveals that the e-Merlin project, due for launch in 2009, is threatened by a shortfall in science research funding that would mean the closure of the observatory

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