Professor Ranko Bon was last week removed from his post, although he will continue to work in the highly rated department. He has been replaced by Professor Colin Gray.
Bon's removal follows his circulation of a letter he wrote to Dr John Rogers, research assessment exercise manager at the Higher Education Funding Council.
E-mailed to academics around the world, the letter is a sarcastic attack on Salford University's Professor Peter Brandon.
Brandon is about to start work as head of a panel deciding how much funding university construction departments should get. Bon believes Brandon should not lead the panel because he was involved in funding assessments in 1992 and 1996.
Bon's letter says he is writing to congratulate the funding council on its choice of Brandon. For legal reasons, the letter cannot be published.
The letter was circulated via the worldwide Co-operative Network for Building Research on 21 January, and Reading University's vice-chancellor removed Bon from his post soon after.
A university statement said: "Professor Ranko Bon is free to express his own views … His views are his own and are not shared by his colleagues or the university."
To see grown-ups acting like this in being afraid to speak out over funding is mind-boggling
Bon on his Dismissal
But the university declined to comment on Bon's dismissal.
Speaking from his home on Monday, Bon said: "I am staggered that so many people are so afraid to voice concerns about funding procedures. To see grown-ups acting like this in being afraid to speak out over funding is mind-boggling."
Brandon said: "Professor Bon's letter is very strange. I have had many letters of support since."
Academics at Reading's construction department are furious about the letter because they believe it could threaten the amount of funding they win in the next assessment round.
Reading and Salford are the only UK construction faculties that have a five-star rating, as such they receive more funding than less well regarded departments.
One source at Reading said: "Ranko's letter hasn't gone down very well. This will distort our work, and make life very difficult."