The European Commission must make "immediate corrections" to the running of the European Research Council (ERC) or risk the body suffering a "deadly blow", an expert review has found.

On 23 July, a panel led by the former president of Latvia, Vaira Vike-Freiberga, published a review of the ERC — the first pan-European initiative to fund frontier research solely on the basis of excellence.

The ERC was established two years ago and is administered by an executive agency under the commission's control. The panel describes the council's management as a source of "great frustration and low-level conflict".

It recommends recruiting a top scientist with managerial experience from outside the commission to run the executive agency, replacing the commission's current appointee. The review says that existing rules preventing such an appointment should be "urgently remedied".

"Cumbersome" regulations and financial controls imposed on the ERC could prevent the council becoming a world-class institution, the review says. Sources of frustration include funding coming as contracts rather than grants, requiring researchers to document in detail time spent working on ERC-funded projects (see Nature 460, 440–441; 2009). The review calls for the ERC to be allowed to award grants, giving researchers greater flexibility.

Rules requiring reviewers to provide formal identification discourage participation, the review says. It calls on the commission to put in place rules based on "trust and not suspicion and mistrust".

The review says these changes must be made over the coming year. A follow-up review should take place in 2011 to ensure improvements have been made. If they have not, the ERC should become independent from the commission, the panel says.

Janez Potočnik, the research commissioner, said in a statement that the recommendations "coincide with [the] commission's own conclusions" on the ERC. "I believe that we will be able to respond positively to the substance of most recommendations," he says.

The commission's official response to the review is due in October.