British universities are facing a brain drain as the row over Brexit in Northern Ireland threatens £250m in research funding from the EU, it has emerged.

The European Research Council (ERC) has written to 98 scientists and academics who were recently approved for €172m (£145m) in grants telling them that if the UK’s associate membership of the €80bn Horizon Europe programme is not ratified they will not be eligible to draw down the money.

Scientists have said they are now scrambling to find alternative EU institutions to host the funding, with some already turning down the ERC money and hoping the UK government’s promise of replacement cash will be delivered.

But they say in either case it is “devastating” as the ERC is considered one of the most prestigious programmes in the world.

Getting an ERC grant is “a badge of honour for any researcher and a signal of world-class leading research” that is a big draw for talent from the US and elsewhere, said Ethan Ilzetzki, an associate professor in economics at the London School of Economics.

“Higher education institutions on the continent are salivating at the prospect of poaching this talent … higher education will be hurt for years to come if this isn’t resolved,” he said.

The then Brexit secretary David Frost fought hard to get associate membership of Horizon Europe as part of the trade deal negotiations in 2020 but ratification has been delayed while the UK fails to implement the Northern Ireland protocol.

UK scientists say they are being punished. Payam Gammage, a scientist at the Beatson Institute at Glasgow University, said: “It is a strange choice for the EU. The UK isn’t going to notice it immediately. It will take a long time to have any impact. All that happens is a bunch of scientists have a lot of opportunities taken away, or their lives just made a lot more difficult. We’re the only victims.”

Gammage was awarded €2m to expand research on mitochondrial genetics and mutations in tumours, but has decided to turn down the ERC grant and apply for replacement funding from the UK Research and Innovation fund. He said this was not the same as there was no detail about the terms and conditions of funding.

“The idea that the UK could replicate the system and apparatus of something like the ERC in the near to medium term is, at best, unrealistic,” Gammage said.

Thiemo Fetzer, a professor of economics at Warwick University who was approved for €1.5m of funding, said: “We all had reason to believe that the UK association was just a matter of the UK implementing the free trade agreement. Now we are waking up to the reality. It is very devastating.”

A molecular biologist who was awarded €2m for a five-year research programme said she would now be looking to commute to Ireland or Belgium. “My main priority is getting the funding because an award at this level of funding happens once in a lifetime,” she said.

Starter grants are worth €1.5m each and consolidator grants are worth up to €2m each, with a further round of advanced grants due to be awarded next month worth up to €2.5m each, which could take the overall UK funding to about €300m.

The science minister, George Freeman, has pledged to extend the guaranteed replacement funding until December 2022.

The ERC president, Prof Maria Leptin, said she was “fervently hoping” that the UK-EU negotiations would be finalised and “result in association” with Horizon Europe.

“Our letters to grantees had to point out the option for portability of the grant outside the UK, but nobody here has any wish at all to entice anyone to leave the UK,” she said.

A spokesperson for the Department for Business, Energy and Industrial Strategy said the delay in ratification was causing “uncertainty for researchers, businesses and innovators based in the UK, and [has] been detrimentally affecting important collaborations between the UK and European partners.”