Funding chiefs are preparing to concentrate cash for postgraduate students in the hands of the research elite if an ongoing review recommends more focused provision.
There has been sustained lobbying by the 1994 Group and Russell Group of research-intensive universities for greater concentration of postgraduate funding in recent months.
They aim to influence the outcome of the review of postgraduate provision being led by Adrian Smith, the Government's director general of science and research.
Now it has emerged that the Higher Education Funding Council for England has discussed rejigging research degree programme (RDP) funding, which is provided to support postgraduate students and is dispensed as part of the block grant.
Hefce announced last month that it was rebalancing the funding formula for mainstream quality- related (QR) research funding for 2010-11 to favour the research elite.
However, it made no mention in the announcement of any plans to redirect RDP cash.
But a paper considered by the Hefce board at a meeting on 28 January suggests that this could be on the cards in 2011-12, pending the outcome of the Smith review.
The paper, details of which were published last week, says: "We have not thus far introduced measures to produce a more concentrated allocation of the council's RDP grant, but we recognise that we may need to return to this issue in the next funding round in 2011, when our thinking can be informed by the findings of the (Smith) inquiry."
The number of students eligible for RDP funding grew after the research assessment exercise 2008, the paper notes, "with the increase located mainly in higher education institutions that do not have the largest groupings of excellent research".
"This sits uncomfortably with our continuing reservations about the breadth and vitality of the training environment in very small units; with the increasing trend for research councils to allocate their support for research students through a limited number of doctoral training centres; and with recent calls from some heads of institution for our funding also to be more concentrated," it says.
It adds that the arguments about postgraduate concentration will be "rehearsed increasingly" ahead of the Smith review reporting its recommendations this spring.
The funding council considered cutting RDP funding for small departments after RAE 2008, but decided it would be unfair to do so.
David Sweeney, director of research at Hefce, said at the time that it "wouldn't be fair not to fund doctoral students in excellent departments", regardless of their location.
The paper, Recurrent Grant for 2010-11, presented to the Hefce board in January, also details the deliberations of the board in advance of its decision on QR funding.
It shows that the council considered three options for rejigging the mainstream QR funding formula, all of which would have resulted in increased concentration.
Under the change adopted, the funding council will give a bigger weighting to research that was judged to be "world leading" (4*) in RAE 2008.
The Hefce paper acknowledges that the move is likely to provoke speculation in the sector about the "scope for further concentration" ahead of next year's funding round, and also identifies risks to Hefce's credibility in pursuing a concentration agenda.
Les Ebdon, chair of the Million+ group of newer universities and vice-chancellor of the University of Bedfordshire, said the drive to increase the focus of research funding was "not evidence-based but politically based".
He added that the country was facing a "looming crisis" in some areas of doctoral study, claiming that the research elite would never supply the numbers of PhD students needed in sectors such as the creative arts.
Wendy Piatt, director general of the Russell Group, highlighted the concerns raised in the Hefce paper about the "breadth and vitality of the training environment" in small units.
"Public funding should be directed towards those institutions most capable of delivering excellent postgraduate research provision," she said.