The Higher Education Funding Council for England currently allocates £205 million of Research Degree Programme (RDP) funding - which is intended to help meet the cost of supervising postgraduate research students - on the basis of student numbers.
The funding council is proposing to bolster that figure in 2012-13 with the £35 million that will be freed up by the withdrawal of quality-related funding currently allocated on the basis of 2* research. It also wants to restore the link between RDP allocation and research quality that existed before the 2008 research assessment exercise.
Hefce would prefer to allocate funding on the basis of how many research students a department has and how much of its research is rated 3* and 4*.
The funding council is also considering halting an institution's RDP funding entirely if its value exceeds a certain proportion of the institution's QR allocation.
The consultation document says the moves are designed "to encourage the supervision of students in higher-quality research environments" while "protecting the diversity of provision that our funding supports".
But John Scott, pro vice-chancellor for research at the University of Plymouth, said the changes, combined with recent moves by the research councils to introduce demand management measures and confine doctoral studentships to designated training centres, were part of efforts to concentrate research in a select band of institutions.
"The recreation of a binary system is happening across the board without this clear and obvious goal being stated or admitted by those responsible," he said.
Alan White, director of the graduate school at the University of East London, agreed.
"If enacted, these proposals will make it harder for post-92s to maintain doctoral activity and will pose another threat to our research activity," he said.
Les Ebdon, chair of the Million+ group of post-1992 institutions, said many universities were "seriously concerned" that research concentration had gone too far and would "damage the seedbeds that produce the research stars of the future".
"It is a policy that is as short-sighted as it is mean," he said.