Ag+ ions, in poly(vinyl methyl ether) (PVME) hydrogel network have been reduced by electron beam irradiation to produce Ag clusters as nanoparticles in fully reduced and highly pure state. XRD (X-ray diffraction) technique confirmed the zero valent state of silver. UV-visible absorption spectral characteristics of Ag cluster confirm that the PVME network is a very efficient stabilizer and prevents further aggregation of Ag clusters. From the results of TEM, it was found that Ag particles were homogenously dispersed in the PVME matrix.