Sarah Collinge, funding manager at Nerc, said the council had decided to prioritise its standard responsive-mode grant scheme because small grants were available from a wider variety of sources.
Researchers will still be able to apply for small grants through Nerc's standard grants scheme, although Dr Collinge admitted she was unsure how such applications would fare.
She said some projects that would not meet the excellence threshold for funding through the standard grants scheme were being funded through the small grants scheme.
"We would rather bring them together so we can ensure the quality across the board is the same," she said. But she admitted that the small grants scheme's slightly higher success rate meant that closing it would probably bring down Nerc's overall success rate to below 20 per cent.
In 2009-10 - the most recent year for which figures are available - the council's overall success rate was 24 per cent. But Dr Collinge said the council would unveil demand management mechanisms towards the end of the year that would improve success rates over subsequent years.
"We are very concerned about success rates and we will definitely try to implement measures that will bring it back up at least to 20 per cent level ... But it will be a relatively long process to achieve it," she said.
Nerc has also announced changes aimed at managing demand for its consortium grants, which fund collaborative research and whose success rates can also be less than 20 per cent. In future there will be only one funding round per year, and researchers will initially submit only a brief "outline application".
Dr Collinge said this would save applicants the effort of working up a full proposal that was "clearly not at the competitive level".
She said having only one annual funding round would also promote consistency: "There can (currently) be more funding available for one round than another, so there is too much of an element of chance (of success) in terms of which round you apply to."