is this true? if so, why? would a merit and several years lab experience not be enough? thanks

Hi! It depends on your subject I would think. A distinction is definitely an advantage if you are applying for funding for your own project in a competitive field, but if you are applying for a project that already has funding or something in a less competitive field then it's probably less important. I know people who have got on an advertised funded PhD with just a pass at MSc level so I think you should be in with a chance with a merit and some relevant experience. Good luck, KB.

In my field (education) they ask for a distinction (or H1 level in Oz). However, they also say that if I can prove other qualifications- especially journal publications etc - this will go far in attaining PhD funding. I think if you can show evidence of other qualifications, this definitely helps.

Of course it's not true. The PhD process is very flexible. A distinction can only help but is very unlikely to be the final deciding factor. I know many people on PhDs without distinctions in their masters, without masters degrees at all and in a few cases not even first class undergrad degrees!