The Science and Technology Ministry warned Tuesday that the European Union’s new guideline on funding for Israeli researchers would hamper the awarding of grants to Israeli scientists and cut Israeli research and development budgets by around 40 percent.

Ministry officials are due to negotiate with EU representatives in an attempt to change the decision's wording.

The European Union has published a guideline for all 28 member states forbidding any funding, cooperation, awarding of scholarships, research funds or prizes to anyone residing beyond the 1967 borders. Any agreement or contract signed with an EU country would state that the settlements are not part of Israel and therefore are not part of the agreement.

As a result, Israeli institutions seeking research grants, including universities and hospitals, may have to declare that they have no ties to organizations that operate in the West Bank or East Jerusalem. Many academic institutions have such ties, mainly with Ariel University.

The European Union's decision would affect, for example, Israeli scientists who seek to take part in Horizon 2020, an 80-billion-euro program running from 2014 to 2020.

During the previous Horizon program, which ran from 2007 to 2013, 1,900 research projects were funded at Israeli universities, hospitals and companies, with funding totaling 750 million euros. This initiative totaled 70 billion euros, with Israel footing 1.3 percent of the bill to qualify.

“The funding received by Israeli scientists exceeded the initial investment,” an official at the Science and Technology Ministry said.

There is also a fear that the EU decision would dissuade European scientists from collaborating with their Israeli counterparts amid concerns that funding from other European sources would dry up.

“The implementation of this decision will hamper the chances of Israeli scientists wishing to participate in research and development projects funded by the European Union," said Science and Technology Minister Jacob Perry. "It will reduce the access of Israeli scientists to significant funding, in contrast to researchers from other countries.”