Stark new divisions emerged today between teaching and research-led universities as England's higher education budgets were set for 2003-04.
A £5.5 billion allocation represents a 6 per cent rise over this year. But the overall increase disguises sharp fluctuations as the Higher Education Funding Council for England begins to implement the government's policy of specialisation.
Teaching grants made to elite universities will be raided to support non-traditional students in the former polytechnics. Research in less prestigious universities will be plundered to provide for the elite.
Almost 50 institutions will see their teaching grants fall in real terms in the coming academic year. Oxford and Cambridge universities, University College London and Imperial College London will lose about £1 million each.
The cash will go instead to institutions such as Lincoln University, where a fivefold increase in the amount of cash given to recruit and retain students from under-represented groups will help boost its teaching grant by £5 million.
About 50 other institutions will see their research grants fall in real terms, with 30 of them facing cuts of 10 per cent or more. The Open University and Cranfield University will lose £700,000 and £500,000 respectively.
The cash is going to the big four - Cambridge, Oxford, UCL and Imperial - which will get at least 15 per cent more research funding in the autumn.
They will share more than £300 million between them - a third of England's research grant.
Sir Howard Newby, chief executive of the Hefce, said: "We have made a number of internal changes to the way in which funds are distributed. This is the first step in encouraging universities to do what they are best at."
Unions attacked the polarisation of teaching and research. Stephen Court, senior research officer at the Association of University Teachers, said: "We strongly believe that teaching benefits from being done in the proximity of research. To decrease the level of linkage is a retrograde step."
Liz Allen, national official in the universities department at lecturers'
union Natfhe, welcomed the extra cash for widening participation. But she added: "We deplore the amount of research selectivity - we don't think there's a case for it. We are going back towards the world of polytechnics."
A spokeswoman for Universities UK said: "UUK is concerned that there is very little real-terms increase in funding for teaching, the core activity for all universities. This is at odds with the government's emphasis on teaching in the white paper. While we welcome the overall increase in research funding, we also have continued concerns about increasing selectivity in research funding."
The fivefold increase in money for widening participation is accompanied by a change in how disadvantaged students are identified. The funding council has earmarked £155 million to help keep students with low entry qualifications and mature students from dropping out. Universities recruiting students with less than three Cs at A level will get a premium, as will those enrolling students aged 21 and older.
The allocation also provides an extra £62 million for supporting part-time students. The existing £38 million for recruiting students from poor neighbourhoods and £10 million for disabled students will continue.
Meanwhile, Hefce confirmed that funding for departments rated 4 in the research assessment exercise would be cut to 58 per cent of the cash they would have received had the results of the 2001 RAE been fully funded.
Sir Howard shed light on the standoff between Hefce and the government over these cuts. He told the House of Commons education select committee: "The initial proposals of my board agreed (on 4-rated departments) were changed as a result of discussions. I would like to fund the 4s and would like to have money left over from that toI bring in newly emerging areas of workI but if you look at higher education as a whole, we cannot sustain world-class research in 90 universities."
Education secretary Charles Clarke said: "Sir Howard has been a valued partner in the discussion of the higher education proposals. We set out in the white paper our view that we needed to shift towards concentration of and collaboration in research excellence."
• The 2003-04 English funding allocations tables are available in the Statistics section of the website. Click here to view.