A new divide between teaching-only and research-based universities could be imminent in Wales.
Rationalisation of research funding, with increased selectivity, is expected following this week's publication of a consultation paper from the Higher Education Funding Council for Wales.
The paper, Review of Research Policy, comes alongside the funding council's recommendation to halve the number of universities in the principality through mergers or takeovers. Natfhe, the college lecturers' union, has already expressed its fear that mergers will intensify discrepancies between teaching-only and research-only institutions.
Hefcw's paper - its second policy reappraisal before a fundamental review by the Welsh Assembly later this year - warns that the Welsh sector is too small and "cannot expect to be known for high quality research across the board". Wales must focus on specific areas of excellence and promote collaborations, the paper says.
While not spreading itself too thinly, the sector "can and should aspire to research excellence in a fair number of areas", the paper says.
Wales receives just 4.3 per cent of the United Kingdom's funding councils' research income. Its 12 research-active institutions share Pounds 45 million - an average of Pounds 3.7 million each compared with almost Pounds 10 million for English institutions. Six research-active institutions received Pounds 500,000 or less in Hefcw research income compared with more than Pounds 18 million for Cardiff University.
The funding council's priority is to close the gap in quality between England and Wales. Wales rewards quality with additional funding on top of research assessment exercise-based cash.
"We strongly oppose any move which would widen the gap further," said Len Arthur, the Welsh executive member of Natfhe. "There is already a gap between old and new in terms of teaching money, and the research gap is phenomenal."
Elin Jones, Plaid Cymru's spokeswoman for post-16 education in the assembly, said that there should be more consultation before mergers. "Some of the most successful and advanced research is taking place at small institutions that are demonstrating innovative and cross-departmental approaches to research," she said.