A cocktail of chemicals from pesticides could be damaging the brains of British bees, according to scientists about to embark on a study into why the populations of the insects have dropped so rapidly in recent decades. By affecting the way bees' brains work, the pesticides might be affecting the ability of bees to find food or communicate with others in their colonies.

Neuroscientists at Dundee University, Royal Holloway and University College London will investigate the hypothesis as part of a £10m research programme launched today aimed at finding ways to stop the decline in the numbers of bees and other insect pollinators in the UK.

Insects such as bees, moths and hoverflies pollinate around a third of the agricultural crops grown around the world. If all of the UK's insect pollinators were wiped out, the drop in crop production would cost the UK economy up to £440m a year, equivalent to around 13% of the UK's income from farming.

Pollinators are also crucial for the quality of fruits and vegetables. Perfectly shaped strawberries, for example, are created only if every single ovary has been pollinated by an insect. And the number of seeds in a pumpkin depends on the number of species of insects that have pollinated the plants. "If you've got 10 pollinators, you'll get more seeds in the pumpkin than you would have got if you've just got one pollinator," said Giles Budge of the Food and Environment Research Agency. "It is important to have that diversity in a pollinating population."

According to the Centre for Ecology and Hydrology, three of the 25 British species of bumblebees are already extinct and half of the remainder have shown serious declines, often up to 70%, since around the 1970s. In addition, around 75% of all butterfly species in the UK have been shown to be in decline. The new £10m Insect Pollinators Initiative (IPI), the largest programme to date of its kind, will look at the multiple reasons thought to be behind this devastation in insect population.

Chris Connolly of Dundee University's Centre for Neuroscience has been awarded £1.5m to lead the work on whether pesticides are having an affect on the brains of bees. Pesticides could be blocking the electrical and chemical signals between neurons, he said, and only subtle changes may be required to produce serious brain disorders. These problems might stop bees identifying the best sources of nectar, or it might affect their ability to navigate to nearby food source and back home again.

Brain disorders in bees might also interfere with their ability to communicate with nest-mates using the "waggle dance", where bees come back to their hive and spread information about the food sources they have found.

The IPI will bring together ecologists, molecular biologists, mathematicians and computer experts to study the decline of honeybees and other insect pollinators from a range of different angles.

"The landscape has changed considerably over the last 30-40 years, we've seen well-documented changes in our birds, our flora and also in some of our insects but now there's a growing concern that our insect pollinators are also in decline, whether that's in terms of the number of honeybees, number of bumblebee species, butterflies and hoverflies," said Andrew Watkinson, director of the Living with Environmental Change programme, which is part of the IPI.

Jane Memmott of the University of Bristol has been awarded a £1.2m grant to identify the hotspots of insect biodiversity in Bristol, Reading, Leeds and Edinburgh. "We're divvying the cities up not just into gardens – we'll look at bits of wasteland, industrial estates, shopping malls – to ask where there are the little oases for plant pollinators. We'll ask what we can do in cities to make them more pollinator-friendly?"

Claire Carvell of the Centre for Ecology and Hydrology will use her £500,000 award to analyse DNA from live wild bees to track how far and wide queen bees fly to start new nests and how far worker bees fly to look for food. "Bumblebees live in colonies of a few hundred workers and a queen. If we want to conserve their populations, we need to think about the number of nests and not just the number of individual bees. But we're faced with a challenge – it's almost impossible to find bumblebee nests in the wild."

The IPI has been funded by the Natural and Environmental Research Council (Nerc), the UK government's department for environment, the Biotechnology and Biological Sciences Research Council, the Scottish Government and the Wellcome Trust. Alan Thorpe, chief executive of Nerc, said: "We can take for granted the variety of vegetables, fruits and flowers that we can enjoy every day but some of the insect pollinators on which they rely are in serious decline. Understanding the complexities of environmental ecosystems is a priority that will help to ensure the survival of pollinators and the benefits they provide."