Downing Street and senior ministers have "reneged" on a promise to give post-92 universities the lion's share of funding for applied research and knowledge-transfer work, it was claimed this week.
Provisional figures that outline how the latest round of the £238 million Higher Education Innovation Fund (Heif) will be allocated in 2006-08 show that old universities will receive the highest levels of funding - up to £3 million each.
Michael Driscoll, chairman of Campaigning for Mainstream Universities, the body representing new institutions, said ministers had promised that Heif support would be targeted at the post-92 sector.
"There's something of a sense of betrayal," Professor Driscoll said.
"In the run-up to the Higher Education Bill, ministers and Downing Street both indicated very strongly that Heif was targeted at our part of the sector and was part of the strategy to encourage diversity of mission - Russell Group universities focusing on blue-skies research and encouraging our part of the sector to engage in applied research and knowledge transfer.
"That promise has been completely reneged on - simply because of the influence of Russell Group universities in Downing Street and in the Department of Trade and Industry."
The DTI, which operates Heif with the Higher Education Funding Council for England, said the latest tranche of funding would be allocated differently from previous Heif rounds. This time, three quarters of the cash will be allocated on the basis of a formula rather than in response to competitive bids from universities.
"One of the reasons for a move to this approach is to achieve a better and more even spread of funding across all the universities," a DTI spokesman said. "The idea is to strengthen the knowledge-transfer base across all universities."
A Hefce spokesman added that the council was committed to providing support for a "diverse range" of knowledge-transfer and exchange activities across a "wide range of institutions".
He said that the new formula would ensure stability and predictability of funding for institutions and would make certain that all universities received some money - in contrast to the previous funding round, in which 40 institutions missed out.
"We arrived at the allocations after both informal and formal consultation, " the spokesman said. "However, the Government very properly expects Heif funding to support knowledge transfer activities. Its allocation must therefore rest on data relevant to those activities, rather than on other aspects of university performance or potential, however valuable in their own terms."
Professor Driscoll said this latest allocation, unlike other Heif rounds, did not encourage collaboration between institutions but rather rewarded work at individual universities. "Colleagues are extremely disappointed with the outcome. Many universities in our part of the sector have seen significant reductions in the amount of funding," he said.
He was unhappy with the "chaotic distribution" of funds, which were not going to areas to which they had been promised.