University heads are afraid that their ability to award PhDs will be lost under plans being developed by the Higher Education Funding Council for England.
A discussion document to inform the funding council's strategic plan sets out four core activities that all universities and colleges should undertake. But vice-chancellors meeting in Manchester last week were worried that research, despite being a core activity, would not be funded at all institutions and that funding for PhD students would be withdrawn.
Leslie Wagner, vice-chancellor of Leeds Metropolitan University, said: "The paper proposed that we all have four core activities: teaching; research; reach-out; and widening participation. It then said only three of them would get core funding. Some institutions would get no money for research. If (Sir Howard Newby, Hefce chief executive) was being consistent, he would have to have core funding for research.
"The paper then asked the question, if you don't get funding for research should you be allowed to register PhD students because you don't have any valued research going on in your university? I asked, if my university has research degree-awarding powers, was (Sir Howard) taking them away? I will have the powers but I won't be able to exercise them."
Sir Howard said: "There is no question here of trying to stop institutions undertaking research. We could not do that even if we tried, and we have no intention of doing so. Institutions have done and will continue to receive a great deal of research income from sources other than Hefce.
"There is a question, however, about how far universities should continue to award PhDs when they undertake little or no Hefce-funded research. We have no means of withdrawing those PhD-awarding powers. This is mainly a practical issue of how far postgraduate research supervision of high quality can be sustained in these circumstances."
At present, the funding council gives universities a teaching grant for first-year postgraduates and a research grant, worth about 15 per cent of the grant for a researcher, for the second and third years. Only departments where more than two-thirds of research is deemed nationally excellent - rated 3a in the research assessment exercise - receive this cash.
However, the funding council is developing performance indicators to establish which universities should get funding for PhD students. The indicators cover: the research environment; supervision; student progress; the development of skills; and institutional quality assurance.
Vice-chancellors are concerned that under the new plans, the funding council could compile a list of universities with funded PhD students and those without.
Ian Halliday, chief executive of the Particle Physics and Astronomy Research Council, who also attended the Manchester meeting, said: "Pparc agrees with the agenda but might have a problem with such an 'in/out' decision."
Professor Halliday said that Pparc, which also gives grants to universities to fund PhD students, would in future take student feedback into account when deciding how to allocate PhD funding.