Cohomology with Grosshans graded coefficients

Let the reductive group G act on the finitely generated commutative k-algebra A. We ask if the finite generation property of the ring of invariants A^G extends to the full rational cohomology ring H^*(G,A). We confirm this when G=SL_2 and also when the characteristic of k is large and the action on A is replaced by the `contracted' action on the Grosshans graded ring gr(A). In the printed version of this paper the first level of some spectral sequences was misidentified as the second. This affects twelve subscripts. We have corrected them (in 3.10, 4.11, 4.12).