A £343,000 annual research fund that has been running for more than 70 years and specifically supports young researchers is to be scrapped by the University of London.
The decision is seen in some quarters as a further move towards reducing the power of the federated university, which consists of 19 colleges ranging from Queen Mary to the Institute of Education, and from which Imperial College recently withdrew.
The Central Research Fund (CRF), which was established in 1937, provides early-career researchers and PhD students with small research grants for blue-skies projects. The funding covers the costs of specific pieces of equipment, travel expenses or study participants, and is dispensed twice a year by three panels covering the social sciences, humanities and medical science and engineering.
The fund was due to be scrapped last year, but was granted an extension. However, the reprieve was temporary, and this academic year will be its last, with the final call for applications closing in March 2010.
Les Back, professor of sociology at Goldsmiths, University of London and chair of the CRF's social sciences panel, said the decision was a "tremendous disappointment".
"It has had a really important impact. I think it is a huge mistake," he said.
The social science panel could provide up to 70 PhD students and early-career researchers with grants of about £1,000 annually, he said.
"That's 70 PhD students where a real difference is made to what they are trying to do. They say the funds will be recirculated through the colleges, but I have a feeling they will be lost in general budgets," he added.
A spokeswoman for the University of London said: "There has been a steady increase in applications for a relatively small fixed sum of money and, if colleges use existing mechanisms to make awards, then it will save on costs."
The cash will be allocated to colleges based on student numbers.
Professor Back said that in spite of the suggestion that the new system would be more efficient, no academic had ever complained that the CRF was too time-consuming.