Researchers who improve their standing in the current research assessment exercise will receive no reward next year. And those who slip a grade will not be penalised.
Sir Howard Newby, who took over as chief executive of the Higher Education Funding Council for England this week, plans to ignore the results of the RAE - due to be published on December 14 - when deciding how much research cash each university gets next year.
Funding chiefs are proposing to delay handing over the money to buy time. The quality of research as assessed by the exercise is expected to have risen since 1996, but the cash available to reward the improvement has not kept pace.
Universities striving to improve their research record will be hardest hit by the delayed payoff. Thousands of researchers who have toiled to improve their grades will not see any reward until 2003.
David Olver, vice-principal for academic planning at Queen Mary, University of London, said: "We would expect to have improved in comparison with 1996. We follow the funding council model exactly and allocate research funding to the unit of assessment. (The postponement) would have a direct impact. The heads of some departments are working on certain assumptions.
"We would expect and hope that the grades were implemented as soon as possible. Otherwise the funding council would be relying on data that is six years old or more and therefore not relevant."
A delay would mean that universities would not be able to take decisions relating to rolling research programmes until much later. Many follow the same model as the funding council to allocate money to departments. "We want to reflect the efforts and excellence of our staff and provide for the implementation of their plans," said one university director of research.
Mike Milne-Picken, head of planning at the University of Central Lancashire, said: "The post-1992 universities are hoping to see rises across the board. All we seek is a reasonable amount of money to ensure that teaching is informed by research. Most of the new universities are trying to develop niche areas of research that are related to our curriculum.
"It's difficult to defend using old data. On balance, it would be better to come up with a mechanism to allow new grades to be taken into account. It suggests we have been living in a time warp for the past year."
Vikki Goddard, head of planning and development at the University of Liverpool, said: "It raises a number of questions about why we have all gone through with this year's RAE in the first place. There is clearly a big delay in terms of benefits. We have been working to the assumption that the outcome will be reflected in the 2002 allocation."
The improved results mean that more universities are expecting money from a limited pot. Funding chiefs now need to decide how much money should go to each RAE grade. Sir Howard's predecessor, Sir Brian Fender, had said that the English funding council wanted to fund subjects rated 3A and 3B while maintaining the money going to those gaining the top grade, 5*, and, if possible, to those rated 5. But Sir Howard has said that he does not want to squeeze grade 4 subjects to achieve this.
The Scottish funding council has indicated that it will not fund subjects rated 3 in the exercise. It may also decide not to delay implementing the 2001 RAE results.
The outcome of the forthcoming comprehensive spending review - due to be announced in July 2002 - will also inform the RAE funding decision. A spokesman for the Treasury said that although the government was committed to education, responding to the terrorist attacks in the US and the foot-and-mouth epidemic would mean that money was tight.
Rodney Eastwood, director of planning and information at Imperial College, London, said: "I would be relatively sympathetic if whatever the funding council comes out with is worth waiting for. We would like to see funding backdated to 2002-03 even if it were not implemented until a year later. And the outcome does not have to wait 12 months - we would want to know and start planning."
A year's grace would also give funding chiefs the time to further develop ideas on funding institutions by mission.
Sir Howard is keen for universities to focus on their strengths. While teaching will be funded at the same rate across institutions, research money is concentrated in institutions excelling at it. Sir Howard wants to develop an equally effective way of rewarding institutions that excel at forging links with industry.