A speech by Vince Cable on distributing cuts to the science budget came under fierce attack from vice-chancellors last week for "fundamental errors" and its potential to damage the UK's reputation.
In an address at the Queen Mary BioEnterprises Innovation Centre in London, the Liberal Democrat business secretary revealed the government's aim to "ration research funding by excellence" and "screen out mediocrity".
He proposed concentrating funds on the 54 per cent of research he called "world class", referring to work given a 3* or 4* score in the last research assessment exercise.
Mr Cable accepted that such an approach "presented problems" adding to the difficulty of spotting "unknown" talent, but his proposal drew scorn from vice-chancellors and scientists over the implication that research not graded 3* or 4* was mediocre.
Among critics of his analysis was Steve Smith, president of Universities UK, who told his annual conference the business secretary's remarks were a "matter of regret".
Pointing out that 90 per cent of quality-related research funding already went to 3* or 4* work, Professor Smith said: "I think this represents concentration. Secondly, it really doesn't help when the Secretary of State talks about mediocrity in UK research."
Les Ebdon, chairman of the Million+ group of new universities, said Mr Cable's comments were "extraordinary". There was also dismay over the mixed messages coming from the government on student immigration, he said. "Our competitors will be loving this."
Privately, other vice-chancellors at the UUK conference were fuming at Mr Cable's speech. The unrest follows the recent claim by Ruth Farwell, chair of GuildHE, that the business secretary was guilty of "not understanding the university sector as much as he should".
Richard Horton, editor of The Lancet, wrote in The Guardian: "Cable's narrow interpretation of quality is an astonishing insult to the thousands of British scientists who help this country (and its ministers) have a well-above-average reputation and global influence."
Professor Smith also set out his case for avoiding damaging cuts in the government's Comprehensive Spending Review, due on 20 October. Using the latest figures from the Organisation for Economic Cooperation and Development, he stressed that competitor countries were already investing more in research.
"I know personally they cannot understand our logic of reducing investment in what they see as the number one route towards future economic growth," he said.
Read Professor Smith's speech in full at http://bit.ly/dtfZk7
UCU STATES CASE AGAINST FOR-PROFIT PROVIDERS
Problems involving for-profit universities in the US could be replicated in Britain if the government opens up the sector to commercial firms, a lecturers' union has claimed.
In a letter to David Willetts, the universities minister, Sally Hunt, the general secretary of the University and College Union, said events in the US showed why for-profit providers should not be allowed greater access to public funds.
In a speech to the Universities UK conference last week, Mr Willetts said commercial providers were the "natural response to the global hunger for higher education".
Ms Hunt pointed to problems in the US, where some for-profit companies - which can draw up to 90 per cent of their income from federal-backed student support - have been accused of malpractice.
It remains unclear how the British government intends to open up higher education to commercial providers, but Mr Willetts said that a Higher Education Bill planned for autumn 2011 would be re-examining the issue.