Andre Geim and Konstantin Novoselov used a block of carbon and some Scotch tape to create graphene, a new material with extraordinary properties. The news that Geim and Konstantin Novoselov had received the 10m Swedish-kronor (£1m) prize was announced today by the Nobel Assembly at the Karolinska Institute in Stockholm. 

Britain's latest Nobel prizewinner has warned that cuts to research budgets could force good scientists abroad and damage universities' efforts to recruit from other countries.

Konstantin Novoselov, a professor of physics at Manchester University, said the country risks losing senior figures and rising stars in science if funding cuts materialise in the government's spending review.

"Without money we won't be able to attract good people here," Novoselov told the Guardian. "The impact is going to be that good scientists will go abroad, especially the young people."

Novoselov, 36, won the 2010 Nobel prize for physics with his colleague, Andre Geim, 51, for creating wafers of carbon that are a single atom thick. Their unusual properties could transform electronics, from solar cells to computers and sensors. Novoselov is the youngest Nobel laureate since 1973.

The news that Geim and Konstantin Novoselov had received the 10m Swedish-kronor (£1m) prize was announced today by the Nobel Assembly at the Karolinska Institute in Stockholm.

Both researchers were born in Russia and collaborated as PhD supervisor and student in the Netherlands before moving to Manchester University, one of Britain's top physics institutes.

Geim is regarded as a playful and highly creative physicist who once published a scientific paper that was co-authored by his pet hamster, Tisha. In other work, he proved that it was possible to levitate frogs using magnetic fields.

Geim and Novoselov's breakthrough came in a deceptively simple experiment in 2004 that involved a block of carbon and some Scotch tape. The two used the tape to strip off layers of carbon that were only one atom thick. These thin wafers of carbon, known as graphene, were found to have extraordinary properties.

Tests showed the graphene layers were stretchy, as strong as steel and almost completely transparent. They are exceptionally good conductors of heat and electricity, properties that have made graphene one of the most exciting new materials for producing electronic components, from flexible touchscreens to pollution sensors. The wafers can also be used to study some of the more peculiar effects of quantum mechanics.

Graphene consists of carbon atoms held together in a lattice like chicken wire. Drawing a pencil across a sheet of paper produces thin sheets of graphite, but Geim and Novoselov were the first to separate these sheets into wafers only a single atom thick. There are around three million sheets of graphene in a millimetre-thick layer of graphite.

Novoselov was chatting online to a friend in Holland at 10am this morning when he heard of his award in a phone call from the Nobel committee. "It was quite shocking. Every October someone speculates about this and you learn not to pay attention."

Geim encouraged creative experiments at the laboratory, Novoselov said. "We'd just try crazy things and sometimes they worked and sometimes not. Graphene was one of those that worked from the very beginning. It's such a robust material and all the effects were so pronounced."

Despite winning the prize, Novoselov said he was planning to work in other areas of physics and was considering taking a year or two of sabbatical leave. "All this graphene business is very exciting, but we've been doing it a while and we're trying to diversify from it and establish some new directions," he said. "I really like it here and want to do my research in Manchester."

Geim said he had not expected the prize and would try not to let the news change his routine. "Having won the Nobel prize, some people sit back and stop doing anything, whereas others work so hard that they go mad in a few years. But I will be going into the office as usual and continuing to work hard and paddle through life as usual. I have lots of research papers to work on at the moment which all need writing up, so I will be carrying on as normal."

In previous research, Geim created a super-sticky tape inspired by geckos' feet. His work on levitating frogs earned him one of the most prestigious spoof prizes in science: an Ig Nobel award.

The Nobel committee said of the two scientists in its press release: "Playfulness is one of their hallmarks. With the building blocks they had at their disposal they attempted to create something new, sometimes even by just allowing their brains to meander aimlessly."

Dame Nancy Rothwell, vice-chancellor of Manchester University, said: "This is a wonderful example of a fundamental discovery based on scientific curiosity with major practical, social and economic benefits for society."

Imran Khan, director of the Campaign for Science and Engineering, said: "The Nobel prizes are a fantastic endorsement of British science. Geim and Novoselov are brilliant examples of foreign scientists who came to the UK because we're a global research hub. But Geim and Novoselov could be the last of their kind if the government presses ahead with its plans to slash investment in science and block talented non-EU migrants from coming here."

Brian Cox, a physicist at Manchester University who works on the Large Hadron Collider at Cern near Geneva, said: "I remember when Andrei Geim started at Manchester in 2001. At that time, UK universities were just beginning to feel the effects of the government's enhanced commitment to science: the mood was optimistic and universities were looking to hire the best young scientists from across the world.

"Andrei was such a scientist, and together with Konstantin Novoselov, they have received the highest award in international science for the curiosity-driven discovery of graphene, a material that has the potential to change the world and generate immense economic benefits. This is what UK science is all about – a world-leading success story that must be treasured and supported for the future."