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A downgrade occurs where a student is enrolled in a PhD and where the research they are undertaking is not at an appropriate level for a PhD and the institution recommends that the student downgrade their degree to a Master's by Research course or where the student, for personal or academic reasons, seeks to revert to a Master's by Research course. There would be no interval between the candidature for the PhD and Master's degree unless the interval was covered by a period of suspension. With a downgrade, the research undertaken by the student while enrolled for the PhD would either be continued in the Master's by Research degree or modified to meet the requirements for the Master's program.

Source: Student Dictionary