English medical school heads this week attacked proposals to transfer their teaching funding from the Department for Education and Skills to the Department of Health.
Education secretary Charles Clarke and then health secretary Alan Milburn first discussed the possible change in March. Amid mounting concern from universities, the Council for Heads of Medical Schools now plans to step up its protests to government.
The DFES and the DoH are discussing transferring funding for teaching only.
This amounted to nearly £0 million in 2001-02. Research funding will continue to come from the Higher Education Funding Council for England.
Universities UK has told ministers that it is fundamentally opposed to a transfer of funds.
Janet Finch, chair of UUK's health committee, said: "With major reorganisation in the health service and new proposals for student funding in higher education, it is not clear what benefits would be achieved."
Medical schools see it as a dangerous separation of teaching and research.
They also fear that, if the teaching budget moved to the DoH, it might fall prey to short-term NHS priorities.
John Cohen, dean of Brighton and Sussex Medical School, said: "The anxiety would be that this might be regarded as an indication that all we were doing was providing particular types of doctors at particular times. We would be vulnerable to fluctuations in demand."
The British Medical Association, which has been looking at the proposal for some time, is seriously concerned. Michael Rees, chair of the BMA's medical academic staff committee, said that the target-oriented NHS was very different from the education sector.
Medical students have also expressed anxiety about the effect it might have on their education.