The next research assessment exercise is to be brought forward by 12 months to 2007, forcing universities to begin their preparations within two years.
The new timing better aligns the RAE with government spending reviews. But it was claimed this week that the real reason for the change was to reduce the impact of the elite layer of 6* research departments, which was announced in January's white paper.
The Higher Education Funding Council for England is understood to have opposed the white paper's proposals to identify both the very best research departments and the improvers. By bringing forward the RAE, Hefce would reduce the life span of 6* departments.
The council also intends to change the criteria for identifying such departments in the run-up to the next RAE. At present, only those that secured the top 5* grade in both the 1996 and the 2001 RAEs have 6* status and the extra money it brings.
Hefce is considering whether to recognise the efforts of teams of internationally excellent researchers working in departments graded 5* and 5. It will discuss this with panel chairs over the next few weeks.
Afterwards, it will publish proposals, with responses due by the end of the year. The results will influence the grants announced in March 2004.
At its board meeting this week, Hefce approved both the new RAE timetable and a new method of research assessment devised by Sir Gareth Roberts, president of Wolfson College, Oxford. His 100-page report containing 16 recommendations is due to go to the boards of the Welsh and Scottish funding councils next month.
Sir Gareth outlined the plans at the Hefce annual meeting at the University of Warwick this week. He told delegates: "There are proposals that, if all are taken on board, would mean quite a radical change, and I hope that they will embrace all these changes."
Under the system, almost a third of institutions would be excluded from the peer-review component of the RAE and its funding, and those that opt out would receive a token payment. In England, this amounts to 40 institutions - most of them colleges of higher education, but some universities would be included. These institutions currently share just 2 per cent of the total funding for research.
Each department would have to submit at least 80 per cent of staff whose contracts require them to conduct research. Any research fellows who were eligible to apply for a grant from the research councils would be included.
Each researcher entered for the exercise would be given a rating based on whether he or she was judged to be one of the best of the internationally excellent researchers (awarded three stars), an internationally excellent researcher (two stars), nationally excellent (one star) or below (no stars).
The funding council would decide how to weight the four categories, leaving open the possibility of variation between different units of assessment.
Sir Gareth said that there would be about 20 units of assessment. A subpanel would judge each of the units with a moderator to ensure consistency. A moderator would also sit on the main panel.
Sir Gareth said: "The most unsatisfactory feature of the previous RAE was the lack of consistency of standards and approaches across the units of assessment. We should have moderators who would have the responsibility of looking across subpanels and checking that they are playing by the rules and that the standards are right."
If approved by the other funding councils, the proposals will be published for consultation over the summer. Preparations for the RAE would start in two years, with the collection of data intended to guide institutions on whether or not to enter the peer-review channel of the assessment process.
Sir Howard Newby, Hefce chief executive, said: "I have given public assurances that we would not have another research assessment exercise until five years had elapsed following the review. However, if the sector felt that there was more merit in bringing it forward, then that's something that we at the funding council would be very happy to do."
In a closed session, Sir Howard outlined the implications of Hefce's strategic plan. Writing in today's THES , he says higher education faces an uncertain future. Although Britain has one of the world's finest higher education systems, "we face formidable challenges ahead with limited resources".