With just six weeks left until the TSB's call for crop protection research projects opens, the body is still in discussions on how levy funds can be used.
The TSB is wrangling over whether the cash - raised by levy bodies within the Agriculture and Horticulture Development Board - can be used to match fund projects or whether it will be classified as "para-fiscal tax" and thus exempt from being used.
Horticultural Development Company chairman Neil Bragg said the situation was "nonsense". He added: "We need to find out exactly what we are supposed to do - the whole scheme is being put out prematurely. It is extremely damaging to an industry struggling to undertake R&D and the Government seems to have moved the goalposts so we can't use the levy."
TSB's call for collaborative R&D funding in new approaches to crop protection opens on 18 January. TSB head of development Paul Mason admitted during a National Horticultural Forum meeting on R&D held last week that the body did "not yet know how it is going to treat the money".
Mason was due to speak at the All Party Parliamentary Group on Science and Technology in Agriculture as HW went to press, along with TSB technologist Alex Chaix and Defra farming and food science deputy director Sue Popple. But industry figures have cast doubt on whether the rules on levy funds will have been finalised by then.
NHF chairman Andrew Colquhoun told HW: "I am very pessimistic - given that this was a long-standing problem - that there will be any quick solution. But the TSB call is going out in a month so there is real urgency needed."
East Malling Research head of science Dr Chris Atkinson agreed: "I cannot believe we are still not getting a clear picture. We are a few weeks away from the call going out and it could be utterly chaotic."
NFU chief horticulture adviser Phil Hudson said the TSB needed to ensure that a decision was taken "swiftly". He urged: "To give people enough time, the TSB must reach a decision by Christmas."
Colquhoun criticised the body for the uncertainty, explaining he and HTA director general David Gwyther had raised the issue of levy cash being classified as public money with the secretary of state last year. "It is by no means a new issue," he insisted.
Consultant Brian Jamieson added: "The money has never been near the Treasury. But the Agriculture & Horticulture Development Board could make a huge contribution [to projects], yet that could be declared off-limits."
Lord Taylor of Holbeach commented: "It strikes me as being quite ridiculous that levy-paying bodies should be considered to be incapable of having partnership funding from Government."
A TSB representative said it was aiming to come up with the "best solution to this particular problem", adding: "There may be rumours that we've made a decision but I want to scotch them. We are still consulting and making absolutely sure that whatever we choose to do is in line with EU state aid rules."
Gwyther added: "I'm not holding my breath on levy money being able to match fund TSB cash. It's going to underline why we've got to try some real new thinking."