The Australian Government appears intent on influencing the type of research undertaken in universities after deciding to abolish the governing board of the Australian Research Council.
The move has sparked outrage across the academic community, with vice-chancellors fearing that the council's research grants will, in future, be open to greater political interference.
John Mullarvey, chief executive of the Australian Vice-chancellors' Committee, said the abolition of the board would expose the peer-review process to much closer ministerial intervention.
He said that although vice-chancellors had confidence in Peter Høj, the ARC chief executive, he would be the only link between the objective peer-review assessment of grant applications and the political judgment of Brendan Nelson, the Education Minister.
Professor Høj said: "No longer will there be a board of community, industry and university representatives to support the ARC chief executive in ensuring the integrity of the grant-awarding process."
The board has 14 members, including the chief scientist and a representative of the National Health and Medical Research Council. It is Australia's major non-medical research funding body, and it will next year allocate more than A$1 billion (£432 million) for projects.
Dr Nelson previously overturned at least three grant applications that were approved through the ARC's peer-review system. He had attacked what he called "cappuccino courses" and raised questions about some of the research being funded. Using his power under the ARC Act, he refused funding for the projects on the grounds that they were not a good use of public funds.
Dr Nelson said the decision to scrap the board followed a review of the governance of statutory authorities. He said the functions of the ARC were best suited to an executive management model.
"I therefore decided to retire the ARC board by early 2006," he said.
He dismissed claims that the decision would affect the traditional operations or autonomy of the ARC, saying that the new structure would retain the council's independence and expedite its funding processes.
The ARC would retain its peer-review processes and the college of experts would continue to be a vital source of independent advice to the Government, he added.
Vicki Sara, former ARC chief executive, said the ARC had to remain an organisation independently managed by experts if Australia was to reap the benefits of world-class research.
"In the past, there have been cheap shots taken at proposals based on their titles rather than their content," she said. Fundamental research had to be "unfettered by influences other than excellence and quality", she said.
Carolyn Allport, president of the National Tertiary Education Union, said Australia's reputation would be at risk if the only research funded was that approved by the Government.