More funding should be channelled to the European Research Council (ERC) and its remit should be widened to include support for PhD students, Universities UK has said.
The vice-chancellors' group made the case in a paper published this week that sets out the UK academy's position on the future of European research.
It comes as organisations begin to consider the shape of the next European framework programme for research, with discussions on its budget set to begin shortly. The current Seventh Framework Programme for Research (FP7) expires in 2013.
The UUK paper, UK Higher Education Sector Position on the Future of European Research, suggests that the ERC, which was set up as part of FP7 to fund the best research across Europe regardless of its location, should be "grown significantly".
It praises the council's use of excellence as the sole criterion for funding and calls for the introduction of a new stream of support for doctoral students. UUK wants the use of excellence as a criterion for funding to be used more widely across the framework programme.
Chris Hale, acting head of UUK's research unit, said: "Within the current climate, it is not an unfeasible scenario that the next European budget for research and development is cut.
"But whatever happens, we want the ERC to get a bigger piece of the cake."
He added that a new stream of funding for PhD students would help build excellence across Europe.
The UUK paper comes as researchers petition to cut FP7's red tape. About 8,000 have now put their names to a demand that the "administrative burden and the financial regulation" of European research funding be simplified.
Mr Hale said that at present, the framework programme duplicates the bureaucracy found at the institutional level.
The total budget for FP7 is EUR51 billion (£45.8 billion) over seven years - 41 per cent more than the previous programme.
Of this, about EUR7.5 billion goes to the ERC.