An independent review of the Portable Antiquities Scheme (PAS) has come out unequivocally in favour of its continued funding.

The report, which was commissioned by the Museums, Libraries and Archives Council (MLA) and published last month, found that the scheme had had "a demonstrable impact on museums, individuals, communities and archaeology".

Roger Bland, the head of PAS, told Museums Journal that he was happy that the review was so positive. "This is very helpful because it provides a secure platform on which we can build."

Many had feared that the review would lead to cuts in the PAS budget but the report recommended an extra £165,000 was needed to restore travel and equipment budgets, invest in IT and maintain regional work.

The scheme was allocated £1.3m this year (2008/09), a cut in real terms that led to the loss of three posts. As a result of the review the scheme's funding will increase to £1.4m in 2010/11, restoring the cuts that were made this year.

Mike Heyworth, the director of the Council for British Archaeology said: "I am delighted with the outcome of the review, but questions still remain about the long-term future of the scheme. Confidence in the MLA has been eroded, and a transfer to the British Museum remains my preferred option in the next two years."

The scheme, which encourages voluntary reporting and recording of archaeological finds is funded by the department for culture via the MLA and is based at the British Museum. In 2007 there were more than 77,000 archaeological objects added to the PAS database.