I've been offered a PhD in Psychology at my current university, which is a decent mid-ranked, but not top, institution. I have an MSc, have worked in research for the past 2 years, and my undergraduate degree is a first from a Russell group uni (though in a completely different subject!)

I'm wondering whether it's worth taking it (as there's a good chance I can also get an external third supervisor who is leading in the field), or whether it is better to turn it down and apply to the top institutions. Essentially, I don't want to risk selling myself short further down the line in my research career.

Will institutional bias have that great an effect if one can demonstrate performance through publication and collaboration with leading players? The ESRC's decision to limit funding to designated 'doctoral training centres' seems to indicate that bias against new universities is as prevalent as ever.

There are many students that cannot get a on a PhD course due to the highly competitive situation. The economic climate is impacting on this and I cannot see this changing for a while. I would say that as you have been offered one in your area of interest then accept it. You could turn this down and not be a successful applicant again. I would suggest that a mid-rated institution with a leading name in the field is an excellent situation. Just because an institution is top-rated doesn't mean that they have the expertise in a particular field. I personally would prefer to work with a leading name for my field. For your career progression within the same area I would value the lead name over institute. If you are doing a PhD to use for a non-specificly related career then institution may be a bonus. It is for you to decide!