A professor of education at Durham University has accused administrators of withholding £1.6 million of her centre's research income to reduce the university's financial deficit.
Carol Fitz-Gibbon said the money had been given to her research centre by primary and secondary schools throughout the UK to pay for a raft of educational projects.
But she claims the university - which collects the funds centrally - is refusing to release the money, stalling research projects.
"Schools are being conned because their money is not going where they intended," she said. "It is absolutely outrageous that the university is taking the schools' money to hide its own deficit, especially when my centre has never gone into the red. I have been patient, I have pleaded for the money, but to no avail. I am very bitter."
Professor Fitz-Gibbon, who is retiring as head of the Curriculum, Evaluation and Management Centre but will remain an emeritus professor, has been to the university's chair of governors. She has also been to its independent auditors in a failed bid to get the money released.
She said 30 posts in the centre were vacant and some research work was failing to be completed because there was no money available to make the appointments.
"My staff are being exploited, and what's worse is that some schools are being denied the research results they deserve and have paid for," she said. "We can't go on like this."
A spokesman for the university said the money was being held on the same basis as income from other departments, in reserve for approved spending.
Despite a deficit of about £1 million last year, university finances were in good shape, he added.
He said: "It is incorrect to say that the income is being used to plug university finances."
"The CEM Centre is a successful unit of the university, providing an excellent service to schools. It is an important contributor to the research quality of education at Durham.
"The university spends more than £5 million a year on its running costs. Holding modest reserves is a sensible financial management strategy for an operation of this scale, given the nature of its income."
The new management of the centre was preparing a business plan that would be considered by the university executive committee shortly, he added.
The centre earns £5.5 million a year in research income, making it one of the biggest educational research groups. It employs 68 members of staff and is carrying out research into policy-related areas including A-level standards, racism in schools, key-stage tests and baseline assessments.
Neil Defty, a project leader at the centre, said staff shortages meant he was working 12 hours a day and at weekends to complete research contracts.
"It's either that or let a project that is worth in the region of £1 million collapse," he said.
Nicola Foster, leader of the middle-years information project, which has grown by 17 per cent in one year, said the workload was becoming intolerable. She said: "We desperately need to invest in this project but I can't see anything changing in the near future. We are all paying a high personal price to keep things going."
Ian McNay, emeritus professor of education and management at Greenwich University, said the practice of raiding research income was growing. "The same thing has happened to me and, to some extent, goes on all over the place, although not usually to this extent," he said. "But while there may be no requirement to spend income on any particular activity, when it is a contract with clients there is at least a legitimate expectation that income will be directed accordingly."
University bureaucracies tended to control and serve the centre rather than the periphery where research was done, he added. "It is very disheartening and raises moral if not legal issues. Researchers need to have eyes like hawks," he said.
Alan Smithers, professor of education at Liverpool University, said: "It must be a temptation for any university facing a deficit to plunder such funds but they need to bear in mind that income has been earned with a great deal of effort and is the seedcorn for future research. It may be a short-term solution, but is highly damaging in the long term. But universities are so cash strapped they are considering these extreme measures."