The Science and Technology Committee says astronomy funding will fall by 20% over four years - the science budget's average real-terms cut was 14.5%.
The MPs say some of the resulting cuts are likely to deter leading scientists from working in the UK.
The government says it has protected the science budget but cannot make individual funding decisions.
Committee chairman Labour MP Andrew Miller said: "If you don't invest in big science at the level it needs, it's going to have a big impact on our competitiveness and pre-eminence in areas that are important to the country."
Continue reading the main storyIt only takes a few million to keep several Northern Hemisphere telescopes operating. It would be no more than a bankers bonus”End Quote Dame Jocelyn Bell Burnell President, Institute of Physics The UK has already had to withdraw from involvement in projects using ground-based telescopes in the Northern Hemisphere.
Professor Dame Jocelyn Bell Burnell, who is president of the Institute of Physics, gave evidence to the MPs that these projects could be reinstated for a relatively small amount of money.
"It only takes ?2-3m to keep several Northern Hemisphere telescopes operating," she told BBC News. "The amount seems to me remarkably little and I observed when we met with the select committee that it would be no more than a banker's bonus."
The president of the Royal Astronomical Society (RAS), Professor Roger Davies, fears that this single decision may drive away many of the country's best astronomers.
"The UK recruits in the global marketplace and there's a great deal of competition for the posts we do have available. If people are no longer able to have access to global facilities then they will think twice about moving here."
The body that funds astronomy and particle physics, the Science and Technology Facilities Council (STFC) told the select committee that withdrawal from telescopes in the Northern Hemisphere was necessary to pay to have access to observatories in the Southern Hemisphere.
'Wholesale' cuts
Professor Davies acknowledges that there were plans to reduce the stake in some Northern Hemisphere observatories "but it's not at all true to say that they would amount to the wholesale cuts we are seeing now".
The science budget as a whole received a more generous settlement in last year's spending review than many had expected. There were fears of cutbacks of between 20% and 30%.
Instead it received a freeze in funding and an assurance that it would be ring-fenced for four years, amounting to a real terms cut of 14.5% over that period.
The cut to particle physics and astronomy research is much worse, partly because because STFC inherited debts of ?75m when it was created in 2007. The funding body said in a statement that it shared the committee's belief that physics research should remain world class.
"Particle and nuclear physics and astronomy, with space science and the other disciplines we support, play a crucial role in inspiring younger people to become involved in science, technology, engineering and mathematics," the statement said.
A spokesman for the Department for Business, Innovation and Skills (Bis), which ultimately funds the research, said: "Despite enormous pressure on public spending, the ?4.6bn per annum funding for science and research programmes has been protected in cash terms and ring fenced against future pressures during the spending review period.
"The Haldane principle dictates that the government cannot intervene in individual funding decisions."
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