The investment in heritage is part of the overall settlement between the Department for Culture, Media and Sport and The Treasury. The figure, just over 5 per cent over the three years, was lower than expected but not as low as some predictions. It comes with a warning that the heritage body will need to make "savings" - notably £1m in administration costs.

The announcement means that English Heritage's funding will be £124.7m in 08/09, £126.7m in 09/10, and £130.7m in 10/11. The organisation will be expected to make saving in staff and administration costs, focusing more of their funding on grants to maintain historic properties for the nation.

Purnell said: "In a very tight spending round, our overall funding settlement for the DCMS was far better than many had expected. Today's allocation to English Heritage means that they will be able to continue their grants programme at present levels and press on with the Heritage protection Review.

"I am also asking English Heritage - along with my own department and all of its grant-making bodies - to make value-for-money and administration savings. This should mean that, for English Heritage, there could be a further £1m available for front line activities."