Physicists have been left reeling by the announcement that research grants that are normally up to five years in length are to be temporarily reduced to just one year.
All new grants allocated by the Science and Technology Facilities Council will be dated to October 2010, pending the outcome of an urgent audit of its activities.
The audit will aim to identify long-term cuts that can be made to research programmes and facilities.
Critics say the one-year timescale will lead to some researchers' contracts not being renewed and could prompt experienced staff to quit departments to escape the insecurity.
The decision will affect both the STFC's "rolling grants", which last five years or more and are the mainstay of many physics departments' funding, as well as "standard grants", which run for three years. No studentship rounds are due within the time frame, the STFC said.
Particle physicists, who are about to be awarded a round of rolling grants, will be immediately affected by the move.
Peter Watkins, head of the particle physics group at the University of Birmingham, said the announcement was "extremely disappointing and worrying".
"Because of the nature of experiments, you need to build up pools of staff ... this makes that much more difficult," he said.
Any suggestion that the move had been timed to target particle physicists was rejected by the STFC, which was at pains to point out that the policy applies across the board.
"It is a decision to be prudent while we are doing the reprioritisation, rather than announce grants that might not be awarded," an STFC spokeswoman said.
However, there is no guarantee that the shortened grants will be extended after the audit, which is expected to finish in December.
The STFC has faced a series of budgetary problems since it announced an £80 million shortfall after the last Comprehensive Spending Review in 2007.
These have been exacerbated by the fall in the value of the pound, which has pushed up the costs of accessing overseas facilities.
STFC grants have already been cut by 25 per cent and whole projects were cancelled following a previous prioritisation exercise. This year has already seen an extra £12 million in cuts as a result of a disappointing funding allocation. The STFC is understood to be facing a shortfall of between £40 million and £45 million for 2010-11.
The Institute of Physics said it regretted the "uncertainty" that shorter grants would cause.
Andy Fabian, president of the Royal Astronomical Society, added: "Scientific research flourishes under continuity, not uncertainty, in funding, and we need to regain stability as soon as possible."