The Natural Environment Research Council has cancelled the summer round of its Standard Research Grant awards - worth £10 million - in a bid to address a £13.2 million financial shortfall, The decision has come as a blow to environmental scientists, who last week announced plans to go to court over their poor showing in the research assessment exercise.
David Brown, Nerc's director of science programmes, said: "It was a regrettable decision and was not taken lightly. If there was any other course of action, we would have taken it."
Researchers will now have to wait until December before they can apply for more money. The funding is normally used to finance up to 50 mainly curiosity-driven projects, thereby supporting up to 50 postdoctoral researchers.
Mr Brown said that this was the only measure the council had planned and that all other streams of funding would continue as normal.
Tim Jickells, professor of environmental sciences at the University of East Anglia, said the decision would cause serious problems. "People usually get funding for about three years. If their money runs out in the autumn, they could now find themselves out of work." He said that UEA was trying to assess what the effects would be, but noted that the decision was "so sudden, it will be very hard to plan".
Peter Cotgreave, director of Save British Science, agreed that Nerc had found itself in an impossible position but said that the ramifications would be enormous. "Postdocs will find themselves dangling, and heads of department will find themselves having to let people go. It is perverse of the government to talk about increasing funding for the science base when one of the research councils is cancelling grants."
A spokesperson for the Office of Science and Technology said: "This is a decision for Nerc council and not a matter for the government. We are confident that Nerc is committed to delivering excellent science."