The vice-chancellor of Leeds University said that the country’s most successful institutions should get 90 per cent of the £1.5 billion in research funding that is allocated to higher education every year.

They currently receive around 80 per cent.

Admitting he was being “deliberately provocative”, Prof Arthur used a speech at a conference to argue that research funding had been spread “significantly more thinly”, which in turn was affecting critical projects.

The 20 research-intensive universities that make up the Russell Group include some of the most prestigious in the country including Oxford, Cambridge, Imperial College London, University College London, Warwick and Nottingham.

But Prof Arthur’s comments were angrily received by other groups, who criticised his plans as “against basic democracy” and said it would ensure Britain could not maintain funding excellence.

Speaking to nearly 300 university and research leaders for a Times Higher Education conference, Prof Arthur said the policy of shared funding with so many universities “came at a price”.

“If we carry on with that trend… and take money away from those universities that have been highly successful in the past, we end up with a progression of mediocrity,” he told the conference at the Royal Society last week.

“How many well-funded research universities do we need? I don’t believe it is 169. I would like to suggest it is somewhere between 25 and 30.”

Last month the Government's Higher Education Funding Council for England (Hefce) announced a review to how funding to universities is distributed.

Currently university research is assessed by the Research Assessment Exercise (RAE) but the Funding Council has been working on proposals for a new system, the Research Excellence Framework (REF).

Prof Arthur argued that research pointed out that funding concentration was important in helping productivity and he feared that the money allocation would be “diluted” even more.

Without a clear policy in favour of focused funding, Britain’s “international standing, profile and performance will drop away”.

His comments drew immediate condemnation from competitors.

David Maguire, pro vice-chancellor for corporate development at Birmingham City University attacked the comments.

“I disagree with almost everything you have said,” he told the conference.

“The notion of concentration is against the peer-review process and basic democracy.”

He was backed by Pam Tatlow, chief executive of the think-tank million+ which represents newer universities, who said that narrowly focused funding was a “no win policy for the UK”.

"The same people who want a market in tuition fees also want a closed shop for research funding,” she said.

"This would reduce the number of UK postgraduates and reduce opportunities for companies like Nissan which access research relevant to their UK operations from Universities like Sunderland.

“It would also completely undermine the transnational partnerships which all UK universities have developed. These are a major source of foreign exchange earnings for the UK.”

Paul Marshall, executive director of the 1994 Group, which represents 19 leading universities outside the Russell Group, including York, Lancaster and Durham, said he supported more concentrated funding but only if the awarding system was truly meritocratic.

"Whatever way it happens, it needs to be competitive and based on demonstrating excellence and achievement," he said.

A Hefce spokesman said research funding was "already highly selective".

"Indeed 75 per cent of our research funds already go to just 25 universities," he said.

"We do not believe that it would be in the national interest to stop funding excellent research carried out by the rest of higher education sector."

(www.eduwo.com, Jainlyn&Charlotte)