The European Commission has dropped plans for a blanket ban on UK involvement in EU research on space projects and supercomputers after a backlash from member states and leading scientists.

Thierry Breton, the former French finance minister who is now the EU internal market commissioner, had claimed the EU needed to keep control of intellectual property and that the UK’s involvement was an unacceptable security risk.

The commission’s proposal was criticised, however, by leading research institutions and questioned by EU capitals, including Germany, Belgium, Spain, Ireland, Italy and the Netherlands. Diplomats were concerned the bloc was treating the UK as if it posed a security risk similar to that of China, sources said.

Following weeks of discussion in Brussels, it is understood that at a meeting of EU diplomats last Friday it was agreed that a blanket prohibition on UK involvement will not be enforced.

Member states insisted the EU capitals would be involved in drafting the criteria for involvement of countries outside of the bloc on a “case by case basis”. Any exclusion of the UK in particular projects will also have to be given the green light by the 27 member states.

“It is still possible for UK entities to be excluded from certain calls, but only based on objective criteria that have been drafted in collaboration with member states,” one diplomat said.

The decision will be welcomed within the international scientific community. Under the trade and security deal struck last Christmas Eve, the UK government retains the right to pay into and participate in the EU’s Horizon Europe research programme, a seven-year, €95.5bn (£82bn) funding scheme.

Research into supercomputers is a priority for the EU and the UK but both are languishing behind China in the race for a breakthrough. China’s latest Jiuzhang quantum computer is claimed to be 100tn times faster than all previous supercomputers.

In March, Thomas Hofmann, the president of the Technical University of Munich, wrote on behalf of institutions in Switzerland, Denmark, Luxembourg, Israel and the Netherlands to warn of a “negative impact” on future research if the UK’s involvement was curtailed.

“Opening the scientific borders for the countries outside of the European Union should go hand in hand with strengthening collaboration with our closest partners and not undermine it,” Hoffman wrote to the Portuguese presidency of the EU.

“Cooperation with the aligned countries is vital for the competitiveness of the European Union’s economy. The latest proposal by the European Commission to exclude longstanding and trustful partner countries like Switzerland, Israel and the United Kingdom from parts of the research programme is not in the interest of Europe’s research community nor the wider society and could be damaging for international cooperation.”