I've actually secured an EPSRC CASE award within the Photonics group at Aston. OK, its not Oxford or Cambridge - but I'm told the group is known and respected internationally, and has a great reputation.
Go for it CASE awards are very hard to get and well sought after so you should take the opportunity. As you've said the research group is well known and respected you should be fine as you are associated with them. The reputation of your supervisors is also important as academia is a very small world! Don't worry about the uni so much - a PhD is the same wherever you get it from. As long as it's good it doesn't matter where it's from.
People get hung up over the reputations of unis as older unis are seen as more prestigious. However this may not be true. It depends on the depts and the lecturers themselves! You may be lucky and get really good ones or unlucky and be based in a competitive dept where it is cut-throat and people are more interested in their research than yours. So you should consider the dept itself and the atmosphere there. Newer unis may be more helpful and dynamic as they are trying to attract more people than older estabished unis.