A research council fell short of good practice when allocating £5 million in grants for knowledge transfer, the Russell Group claimed this week.
The representative body of large research-led universities questioned the Engineering and Physical Sciences Research Council's process for allocating Knowledge Transfer Accounts (KTA), which help universities to commercialise research.
Imperial College London and the universities of Oxford and Edinburgh all had funding bids for the scheme rejected.
Wendy Piatt, Russell Group director-general, said many members had expressed concerns, including "the fact that the KTA process departed from normal peer-review practice; that institutions were not given sufficient opportunity to respond to the panel's concerns about their bids; and that the criteria for assessment were unclear until late in the day".
Times Higher Education understands that plans to launch a formal challenge to the decision are being discussed.
An EPSRC spokesman said: "Applications were considered through a fair and transparent peer-review process. Grant offers have been made and we do not intend to change them." He said unsuccessful applicants had received feedback.