Science minister Ian Taylor has rebuffed criticism of the multimillion pound Realising Our Potential Award scheme, insisting that it is "fully living up to expectations".

Announcing the publication of an Office of Science and Technology review of the initiative, which aims especially to reward researchers for linking up with industry, Mr Taylor said that there had been "excellent demand" for Ropa. In total 1,520 applications have been made of which 719 were granted awards totalling Pounds 71 million.

But despite the vigorous defence of the scheme mounted by the OST, sources at the Department of Trade and Industry say that it is not clear whether there will be a further round of funding next year.

Concerns about the initiative, particularly the quality of the work funded, have been noted by academic and industrialists charged with assessing Ropa research proposals. The worries have been most acute among assessment panels associated with the Biotechnology and Biological Research Council and the Medical Research Council. In a confidential report earlier this year for Sir John Cadogan, the director general of research councils, the MRC's molecules and cells panel is said to have "repeatedly expressed its concerns that the Ropa scheme was supporting second or even third-rate science".

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Last week's report notes the concerns of some assessment panels at the scarcity of applicants taking advantage of the Ropa scheme's funding of highly speculative work. It recommends that the scheme's guidelines be reconsidered. This could result in amendments "to provide clearer guidance to applicants on the potential of the scheme to back truly original proposals".

The OST says the experience of the assessment panels suggests that they "take the need to use judgement and discretion seriously. Even so it is clear that several panel members may have believed they had less discretionary freedom than was intended". The report recommends amendments to the Ropa guidelines "to clarify how the criteria of originality and technical feasibility are to be interpreted, and that clearer guidance should be given to panel members on their freedom of action".

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Jane Lee, director of corporate affairs at the MRC, said: "The report is fair and helpful in flagging some of the imperfections and misconceptions in the early stages of the scheme, many of which should be ironed out by future proposals."

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