Funding chiefs look set to sidestep the government's controversial proposals for further concentration of research as set out in January's higher education white paper.
The move represents a near-total undoing of the government plans and is a vindication for those, including vice-chancellors, research councils and MPs - backed by The THES - who campaigned against further concentration.
Under the model being considered by all four of the nation's funding bodies, the distinction between different degrees of research excellence would be far less divisive.
Instead of the present hard distinctions between the different grades identified by the research assessment exercise, the funding bodies would almost certainly adopt a more graduated scale of research excellence.
Adoption of this model - proposed by Sir Gareth Roberts in his recent review of research assessment and backed unanimously by 300 respondents to the consultation - would soften the blow being dealt to departments that just fail to make the grade.
The English funding council this week denied that research concentration had occurred to the extent portrayed.
While the funding to departments graded 4 - demonstrating nationally excellent work - in the 2001 RAE has been cut, there has been a migration of staff to higher-rated departments.
Rama Thirunamachandran, director of research at the Higher Education Funding Council for England, said: "There are almost as many staff - some 22,000 - in the 5 and 5* rated units in the 2001 RAE as there were in total in all 4, 5 and 5* units in 1996, which was 23,000 people.
"This means that we are actually funding more researchers at a higher unit of resource after the 2001 RAE. This has necessarily limited the funds available for units rated below 5.
"The whole debate is rather overheated and has created more heat than light. This is particularly unfortunate at a time when the last spending review provided considerably more funding for research - a £1.25 billion addition in 2005-06 compared with 2002-03."
He said that he was not sure the debate would even have taken off had the white paper not introduced the idea of a 6* grade, which received £20 million.
Mr Thirunamachandran rejected research commissioned by Universities UK from consultants Evidence, published last week, which argues that the government has produced no evidence to back its plans to concentrate research funding.
He said the report for UUK "totally fails to take account of the fact that there will always be a limit on the amount of public funding for research".
A UUK spokesperson said: "We recognise that the overall level of funding is limited. We have, however, reiterated the importance of maintaining a balance between funding for the very top-rated departments, protecting excellence where it exists across the sector and support for emerging and improving research.
"The Evidence findings underpin the importance of this approach for the research base, highlighting the contribution of nationally excellent departments, notably grade 4 departments that perform above the world average in science, for example."
Evidence's Jonathan Adams said: "We recognise there's a limited pot and more money should be concentrated on the best - but the key issue is the steepness of the slope."
He said the differential in use "makes the slope so steep that it's difficult to see how lower grades can make the step up". But he welcomed the plan for continuous grading as "a good thing".
Higher education minister Alan Johnson told The THES earlier that he was listening to the view that some aspects of research policy were not white-paper issues. He said that while the higher education bill was the government's priority over the next few months, it would "take great pains to ensure we are getting (research policy) right".
A spokeswoman for the Department for Education and Skills said the white paper proposals were intended to "provide extra support to our very best research departments to ensure that they can continue to recruit, reward and retain the best researchers in order to compete with their strongest international competitors".