The chances of securing a grant from the research councils have plummeted, with a Times Higher Education analysis showing that the overall success rate of applicants has hit an all-time low of 23 per cent.
More people applied for grants in 2008-09 than ever before, but significantly fewer grants were handed out.
The figures, which cover six research councils, show that applications were up nearly 6 per cent on 2007-08, but the number of grants on offer fell by 14 per cent.
A total of 13,452 grant applications were lodged, 745 more than in the previous year, and 3,044 bids secured funding, 503 fewer than in 2007-08.
The overall success rate for grant applications fell from 28 to 23 per cent over the period, a further fall on the 30.5 per cent recorded in 2006-07.
For the first time, two councils - the Arts and Humanities Research Council and the Economic and Social Research Council - have success rates below 20 per cent.
This is particularly significant in light of a report published by Research Councils UK in June 2007, which warns that this is the threshold below which general success rates should not be allowed to fall.
"RCUK ... accepts that success rates below 20 per cent represent a particular risk to both the efficiency and effectiveness of the peer- review system, not least because of the demoralising effect on researchers. This risk must be guarded against specifically," the report, RCUK Response to the Project Report and Consultation on the Efficiency and Effectiveness of Peer Review, says. It adds that rates below 20 per cent are enough to "justify intervention".
Last year, the AHRC had the lowest success rate of any research council, down from 23 per cent to 18 per cent.
This is equal to less than one in five applicants securing grants, almost half the successful proportion seen two years ago, when the success rate was 34 per cent.
The ESRC was not far behind, with just 19 per cent of applicants securing grants, down from 24 per cent the year before.
Success rates also dropped at the other councils, although they remained above the 20 per cent mark.
The Biotechnology and Biological Sciences Research Council's rate dropped from 29 to 21 per cent - the biggest fall of any of the councils this year. The Natural Environment Research Council figure fell from 28 to 24 per cent, while the Medical Research Council's fell from to 22 per cent.
The Engineering and Physical Sciences Research Council, which has introduced a controversial policy this year to temporarily bar unsuccessful bidders from applying for further funding, recorded a drop from 30 to 26 per cent.
Ian Diamond, chief executive of the ESRC and chair of RCUK, said research councils were "awfully concerned" about the downward trend, but ruled out any RCUK-wide intervention - including capping the number of applications that institutions can submit - saying it was a matter for individual councils.
"Pressing a button just because it has got to 19 per cent is not something we do," he said. He denied that longer, larger grants - which a few councils have recently introduced - were a problem. "They reduce the burden on academics in a very helpful way," he said.
A portal is being introduced by RCUK next year to allow success rates to be monitored more closely.