University departments will be able to set the doctoral student stipend rates for some funded research students from October next year.
The Engineering and Physical Science Research Council has agreed a mechanism that enables departments to get money upfront for doctoral training accounts (DTAs) rather than being given studentship quotas.
Universities will not be forced to adopt the new system, but David Leech, director of programme operations at the EPSRC, thinks most will opt in.
"They can set the rate of the stipend above the minimum level to attract good students. They may also wish to extend the level of support beyond three years, although we expect people to complete in four years," he said.
This could lead to fewer students being funded by the EPSRC, but because the funding is upfront, departments will be able to talk to other funders to offset any decline in numbers.
The amount will be calculated by taking the quota for each department and converting it into an equivalent cash sum based on the cost of a three-year studentship, currently Pounds 35,000.
Students must be paid the national minimum stipend (currently Pounds 6,500), but there is no maximum. Departments will be free to hold on to money if they do not find suitable students.
Oxbridge fees will be excluded from DTA funding, but London weighting will be factored in. Mathematics grants will be paid through DTAs but will be implemented separately as grant levels are calculated differently.
James Groves, general secretary of the National Postgraduate Committee, said that the current system did not take account of students' different situations. Now they could be tailored to need.