Cambridge and Edinburgh universities could take over the Royal Observatories under proposals being considered by the Particle Physics and Astronomy Research Council.
Exploratory talks between the council and the institutions will take place soon.
If they succeed, the Royal Greenwich Observatory, which is in Cambridge, will come under the auspices of Cambridge University while Edinburgh University will assume responsibility for the Royal Observatory, Edinburgh.
The initiative is part of a move by the council to put in place "cleaner" arrangements for the management of ground-based astronomy in the United Kingdom while taking into account the crucial role universities play in the field.
The council also wants to provide its island observatory sites at Hawaii and the Canary Islands with much greater autonomy to reduce the overheads associated with the management of the sites.
A council official said that the restructuring of ground based astronomy in the UK and at the council's island sites was the "biggest challenge" facing the council over the next few years.
The proposals stem from a radical shift in council policy recommended by a council review carried out by a team chaired by Jim Hough of the University of Hertfordshire.
The council will be placing much greater emphasis on the customer-contractor principle, separating policy and funding from management and delivery of initiatives.
The council is facing a Pounds 5 million hole in its finances after the recent science budget allocation to the councils from the Office of Science and Technology.