diff --git a/.changeset/loud-ravens-drop.md b/.changeset/loud-ravens-drop.md
new file mode 100644
index 0000000000..59fb1618c5
--- /dev/null
+++ b/.changeset/loud-ravens-drop.md
@@ -0,0 +1,5 @@
+---
+"svelte": patch
+---
+
+fix: handle nested script tags
diff --git a/packages/svelte/src/compiler/phases/3-transform/client/transform-client.js b/packages/svelte/src/compiler/phases/3-transform/client/transform-client.js
index 124eee0a52..5102e62c09 100644
--- a/packages/svelte/src/compiler/phases/3-transform/client/transform-client.js
+++ b/packages/svelte/src/compiler/phases/3-transform/client/transform-client.js
@@ -84,7 +84,10 @@ export function client_component(source, analysis, options) {
 		},
 		legacy_reactive_statements: new Map(),
 		metadata: {
-			template_needs_import_node: false,
+			context: {
+				template_needs_import_node: false,
+				template_contains_script_tag: false
+			},
 			namespace: options.namespace,
 			bound_contenteditable: false
 		},
diff --git a/packages/svelte/src/compiler/phases/3-transform/client/types.d.ts b/packages/svelte/src/compiler/phases/3-transform/client/types.d.ts
index 14b628a89d..96fce18986 100644
--- a/packages/svelte/src/compiler/phases/3-transform/client/types.d.ts
+++ b/packages/svelte/src/compiler/phases/3-transform/client/types.d.ts
@@ -47,9 +47,22 @@ export interface ComponentClientTransformState extends ClientTransformState {
 	readonly template: string[];
 	readonly metadata: {
 		namespace: Namespace;
-		/** `true` if the HTML template needs to be instantiated with `importNode` */
-		template_needs_import_node: boolean;
 		bound_contenteditable: boolean;
+		/**
+		 * Stuff that is set within the children of one `create_block` that is relevant
+		 * to said `create_block`. Shouldn't be destructured or otherwise spread unless
+		 * inside `create_block` to keep the object reference intact (it's also nested
+		 * within `metadata` for this reason).
+		 */
+		context: {
+			/** `true` if the HTML template needs to be instantiated with `importNode` */
+			template_needs_import_node: boolean;
+			/**
+			 * `true` if HTML template contains a `<script>` tag. In this case we need to invoke a special
+			 * template instantiation function (see `create_fragment_with_script_from_html` for more info)
+			 */
+			template_contains_script_tag: boolean;
+		};
 	};
 	readonly preserve_whitespace: boolean;
 
diff --git a/packages/svelte/src/compiler/phases/3-transform/client/visitors/template.js b/packages/svelte/src/compiler/phases/3-transform/client/visitors/template.js
index 4f82c897a9..5bef734b63 100644
--- a/packages/svelte/src/compiler/phases/3-transform/client/visitors/template.js
+++ b/packages/svelte/src/compiler/phases/3-transform/client/visitors/template.js
@@ -1065,7 +1065,10 @@ function create_block(parent, name, nodes, context) {
 		after_update: [],
 		template: [],
 		metadata: {
-			template_needs_import_node: false,
+			context: {
+				template_needs_import_node: false,
+				template_contains_script_tag: false
+			},
 			namespace,
 			bound_contenteditable: context.state.metadata.bound_contenteditable
 		}
@@ -1085,10 +1088,14 @@ function create_block(parent, name, nodes, context) {
 			node: id
 		});
 
-		const callee = namespace === 'svg' ? '$.svg_template' : '$.template';
-
 		context.state.hoisted.push(
-			b.var(template_name, b.call(callee, b.template([b.quasi(state.template.join(''), true)], [])))
+			b.var(
+				template_name,
+				b.call(
+					get_template_function(namespace, state),
+					b.template([b.quasi(state.template.join(''), true)], [])
+				)
+			)
 		);
 
 		body.push(
@@ -1097,7 +1104,7 @@ function create_block(parent, name, nodes, context) {
 				b.call(
 					'$.open',
 					b.id('$$anchor'),
-					b.literal(!state.metadata.template_needs_import_node),
+					b.literal(!state.metadata.context.template_needs_import_node),
 					template_name
 				)
 			),
@@ -1138,12 +1145,14 @@ function create_block(parent, name, nodes, context) {
 				// special case — we can use `$.comment` instead of creating a unique template
 				body.push(b.var(id, b.call('$.comment', b.id('$$anchor'))));
 			} else {
-				const callee = namespace === 'svg' ? '$.svg_template' : '$.template';
-
 				state.hoisted.push(
 					b.var(
 						template_name,
-						b.call(callee, b.template([b.quasi(state.template.join(''), true)], []), b.true)
+						b.call(
+							get_template_function(namespace, state),
+							b.template([b.quasi(state.template.join(''), true)], []),
+							b.true
+						)
 					)
 				);
 
@@ -1153,7 +1162,7 @@ function create_block(parent, name, nodes, context) {
 						b.call(
 							'$.open_frag',
 							b.id('$$anchor'),
-							b.literal(!state.metadata.template_needs_import_node),
+							b.literal(!state.metadata.context.template_needs_import_node),
 							template_name
 						)
 					)
@@ -1217,6 +1226,23 @@ function create_block(parent, name, nodes, context) {
 	return body;
 }
 
+/**
+ *
+ * @param {import('#compiler').Namespace} namespace
+ * @param {import('../types.js').ComponentClientTransformState} state
+ * @returns
+ */
+function get_template_function(namespace, state) {
+	const contains_script_tag = state.metadata.context.template_contains_script_tag;
+	return namespace === 'svg'
+		? contains_script_tag
+			? '$.svg_template_with_script'
+			: '$.svg_template'
+		: contains_script_tag
+			? '$.template_with_script'
+			: '$.template';
+}
+
 /**
  *
  * @param {import('../types.js').ComponentClientTransformState} state
@@ -1847,6 +1873,9 @@ export const template_visitors = {
 			context.state.template.push('<!>');
 			return;
 		}
+		if (node.name === 'script') {
+			context.state.metadata.context.template_contains_script_tag = true;
+		}
 
 		const metadata = context.state.metadata;
 		const child_metadata = {
@@ -1885,7 +1914,7 @@ export const template_visitors = {
 			// custom element until the template is connected to the dom, which would
 			// cause problems when setting properties on the custom element.
 			// Therefore we need to use importNode instead, which doesn't have this caveat.
-			metadata.template_needs_import_node = true;
+			metadata.context.template_needs_import_node = true;
 		}
 
 		for (const attribute of node.attributes) {
diff --git a/packages/svelte/src/internal/client/reconciler.js b/packages/svelte/src/internal/client/reconciler.js
index 80c221e448..848e7205a3 100644
--- a/packages/svelte/src/internal/client/reconciler.js
+++ b/packages/svelte/src/internal/client/reconciler.js
@@ -9,6 +9,25 @@ export function create_fragment_from_html(html) {
 	return elem.content;
 }
 
+/**
+ * Creating a document fragment from HTML that contains script tags will not execute
+ * the scripts. We need to replace the script tags with new ones so that they are executed.
+ * @param {string} html
+ */
+export function create_fragment_with_script_from_html(html) {
+	var content = create_fragment_from_html(html);
+	var scripts = content.querySelectorAll('script');
+	for (const script of scripts) {
+		var new_script = document.createElement('script');
+		for (var i = 0; i < script.attributes.length; i++) {
+			new_script.setAttribute(script.attributes[i].name, script.attributes[i].value);
+		}
+		new_script.textContent = script.textContent;
+		/** @type {Node} */ (script.parentNode).replaceChild(new_script, script);
+	}
+	return content;
+}
+
 /**
  * @param {Array<import('./types.js').TemplateNode> | import('./types.js').TemplateNode} current
  * @param {null | Element} parent_element
@@ -63,14 +82,16 @@ export function remove(current) {
 }
 
 /**
+ * Creates the content for a `@html` tag from its string value,
+ * inserts it before the target anchor and returns the new nodes.
  * @template V
- * @param {Element | Text | Comment} dom
+ * @param {Element | Text | Comment} target
  * @param {V} value
  * @param {boolean} svg
  * @returns {Element | Comment | (Element | Comment | Text)[]}
  */
-export function reconcile_html(dom, value, svg) {
-	hydrate_block_anchor(dom);
+export function reconcile_html(target, value, svg) {
+	hydrate_block_anchor(target);
 	if (current_hydration_fragment !== null) {
 		return current_hydration_fragment;
 	}
@@ -78,12 +99,11 @@ export function reconcile_html(dom, value, svg) {
 	// Even if html is the empty string we need to continue to insert something or
 	// else the element ordering gets out of sync, resulting in subsequent values
 	// not getting inserted anymore.
-	var target = dom;
 	var frag_nodes;
 	if (svg) {
 		html = `<svg>${html}</svg>`;
 	}
-	var content = create_fragment_from_html(html);
+	var content = create_fragment_with_script_from_html(html);
 	if (svg) {
 		content = /** @type {DocumentFragment} */ (/** @type {unknown} */ (content.firstChild));
 	}
diff --git a/packages/svelte/src/internal/client/render.js b/packages/svelte/src/internal/client/render.js
index 3080a1b8bd..eb51d41530 100644
--- a/packages/svelte/src/internal/client/render.js
+++ b/packages/svelte/src/internal/client/render.js
@@ -23,14 +23,18 @@ import {
 	PassiveDelegatedEvents,
 	DelegatedEvents,
 	AttributeAliases,
-	namespace_svg,
-	namespace_html
+	namespace_svg
 } from '../../constants.js';
-import { create_fragment_from_html, insert, reconcile_html, remove } from './reconciler.js';
+import {
+	create_fragment_from_html,
+	create_fragment_with_script_from_html,
+	insert,
+	reconcile_html,
+	remove
+} from './reconciler.js';
 import {
 	render_effect,
 	destroy_signal,
-	get,
 	is_signal,
 	push_destroy_fn,
 	execute_effect,
@@ -78,17 +82,35 @@ export function empty() {
 
 /**
  * @param {string} html
- * @param {boolean} is_fragment
+ * @param {boolean} return_fragment
  * @returns {() => Node}
  */
 /*#__NO_SIDE_EFFECTS__*/
-export function template(html, is_fragment) {
+export function template(html, return_fragment) {
 	/** @type {undefined | Node} */
 	let cached_content;
 	return () => {
 		if (cached_content === undefined) {
 			const content = create_fragment_from_html(html);
-			cached_content = is_fragment ? content : /** @type {Node} */ (child(content));
+			cached_content = return_fragment ? content : /** @type {Node} */ (child(content));
+		}
+		return cached_content;
+	};
+}
+
+/**
+ * @param {string} html
+ * @param {boolean} return_fragment
+ * @returns {() => Node}
+ */
+/*#__NO_SIDE_EFFECTS__*/
+export function template_with_script(html, return_fragment) {
+	/** @type {undefined | Node} */
+	let cached_content;
+	return () => {
+		if (cached_content === undefined) {
+			const content = create_fragment_with_script_from_html(html);
+			cached_content = return_fragment ? content : /** @type {Node} */ (child(content));
 		}
 		return cached_content;
 	};
@@ -96,17 +118,35 @@ export function template(html, is_fragment) {
 
 /**
  * @param {string} svg
- * @param {boolean} is_fragment
+ * @param {boolean} return_fragment
+ * @returns {() => Node}
+ */
+/*#__NO_SIDE_EFFECTS__*/
+export function svg_template(svg, return_fragment) {
+	/** @type {undefined | Node} */
+	let cached_content;
+	return () => {
+		if (cached_content === undefined) {
+			const content = /** @type {Node} */ (child(create_fragment_from_html(`<svg>${svg}</svg>`)));
+			cached_content = return_fragment ? content : /** @type {Node} */ (child(content));
+		}
+		return cached_content;
+	};
+}
+
+/**
+ * @param {string} svg
+ * @param {boolean} return_fragment
  * @returns {() => Node}
  */
 /*#__NO_SIDE_EFFECTS__*/
-export function svg_template(svg, is_fragment) {
+export function svg_template_with_script(svg, return_fragment) {
 	/** @type {undefined | Node} */
 	let cached_content;
 	return () => {
 		if (cached_content === undefined) {
 			const content = /** @type {Node} */ (child(create_fragment_from_html(`<svg>${svg}</svg>`)));
-			cached_content = is_fragment ? content : /** @type {Node} */ (child(content));
+			cached_content = return_fragment ? content : /** @type {Node} */ (child(content));
 		}
 		return cached_content;
 	};
diff --git a/packages/svelte/tests/runtime-runes/samples/nested-script-tag/_config.js b/packages/svelte/tests/runtime-runes/samples/nested-script-tag/_config.js
new file mode 100644
index 0000000000..29b236d929
--- /dev/null
+++ b/packages/svelte/tests/runtime-runes/samples/nested-script-tag/_config.js
@@ -0,0 +1,28 @@
+import { test } from '../../test';
+
+/**
+ * @type {any[]}
+ */
+let log;
+/**
+ * @type {typeof console.log}}
+ */
+let original_log;
+
+export default test({
+	skip_if_ssr: 'permanent',
+	skip_if_hydrate: 'permanent', // log patching will be too late
+	before_test() {
+		log = [];
+		original_log = console.log;
+		console.log = (...v) => {
+			log.push(...v);
+		};
+	},
+	after_test() {
+		console.log = original_log;
+	},
+	async test({ assert }) {
+		assert.deepEqual(log, ['init']);
+	}
+});
diff --git a/packages/svelte/tests/runtime-runes/samples/nested-script-tag/main.svelte b/packages/svelte/tests/runtime-runes/samples/nested-script-tag/main.svelte
new file mode 100644
index 0000000000..6acc8c94fb
--- /dev/null
+++ b/packages/svelte/tests/runtime-runes/samples/nested-script-tag/main.svelte
@@ -0,0 +1,5 @@
+<div>
+	<script>
+		console.log('init');
+	</script>
+</div>