Scientists at the University of Cambridge have been awarded £12 million to aid their research into graphene – a material scientists claim has unparalleled capabilities.

In plans outlined today by the Chancellor George Osborne, a total of £21.5 million will be granted to researchers at some of the UK’s top academic institutions to aid the development of the recently discovered material. Graphene, which forms carbon molecule sheets just one atom thick, has been identified as one of the world’s lightest, strongest and most conducive materials.

Hundreds of times stronger than steel and able to conduct electricity a million times better than copper, graphene could, if commercialised more widely, prove a boost to UK industry, in applications from telecommunications to aerospace technology. The research at Cambridge will capitalise on the material’s flexibility in the field of advanced electronics to create thinner and lighter touchscreens and computer displays.

Announcing the investment, Osborne said it would take the technology “from the British laboratory to the British factory floor.” He added that “this shows that even in tough times we are investing in science which is vital to helping the UK get ahead in the global race.” Public funding will be in addition to £12 million in contributions from companies including Airbus, defence company BAE Systems and Rolls-Royce.

Cambridge is not the only institution to benefit from funding. Other successful research projects are based at Royal Holloway, Exeter, Durham and Imperial College, London. However, the decision to award Cambridge researchers more than half of the total sum after the Engineering and Physical Sciences Research Council (EPSRC) identified their project as the most promising snubbed the University of Manchester, where graphene was first isolated in 2005. It was Manchester academics Andre Geim and Konstantin Novoselov who had discovered it, for which they were awarded the 2010 Nobel Prize in Physics.

David Willetts, minister for universities and science, added his approval to the scheme, saying it was “vital we harness the excellent research taking place in our world class institutions to exploit the commercial potential of this astonishing material.” Funding for science has been largely protected from state cuts, with the chancellor in his latest budget adding £600 million to research investment.