Leader: High road, low road, cul-de-sac

Next week's Glasgow East by-election is about more than the decline of the Labour Party in Scotland. A victory for the Scottish National Party would indeed be a major blow to Gordon Brown, but it would also consolidate the SNP's position and give its leader, Alex Salmond, the mandate with which to pursue with a vengeance his party's goal for an independent Scotland.

To convince the voters that separation from the rest of the UK is the path to prosperity, the party has to prove that such a move will bring real benefits for the country. Its interim report into the future of higher education, published last month, made increasing economic growth and improving the nation's skill levels its key priorities as part of this attempt.

But with its policy of no tuition fees, the Scottish Government's commitment to funding universities from the public coffers seemed like a very bad joke when Universities Scotland's bid to get more cash for the sector in the Scottish Budget Spending Review fell £138 million short of the sum it asked for. Fiona Hyslop, the Education Secretary, subsequently found a few extra millions for the sector, but sporadic largesse is no solution.

Two fields in which Scotland is world class are financial services and higher education, and the Scots can justifiably be proud of their universities, with three in the world's top 100 (Edinburgh, Glasgow and St Andrews) and four in the top 15 new universities in the UK (The Robert Gordon, Queen Margaret, Glasgow Caledonian and Napier). Institutions that are superb at blue-skies research are now being steered towards applied research by Ms Hyslop. "The connection between universities and the economy is central," she says. And universities are already headed in the direction the Government desires - they brought in £312.7 million from external sources during 2006-07, a 21 per cent rise on the previous academic year, according to a recent Higher Education Business and Community Interaction survey.

The proud Scottish higher education sector goes back to medieval times, when Scotland boasted three universities against England's two - St Andrews (founded 1411 by papal bull), Glasgow (founded 1451 by papal bull) and Aberdeen (founded 1495 by papal bull). Edinburgh followed in 1583, founded by a royal charter.

But its history has been a chequered one. In the 18th century, universities were vulnerable to the ups and downs of student demand and, thus, to potential financial embarrassment: St Andrews had to dispose of most of the historic buildings of its constituent St Leonard's College after forming the so-called United College in 1747; at Edinburgh, a downturn in recruitment after 1770 resulted in reduced professorial incomes; and in 1876 St Andrews, with just 130 students on its roll, contemplated closure.

At present, the independence-seeking Scottish Government wants to have its cake and eat it - retain both blue-skies research and boost applied research. But with tuition fees ruled out, is this affordable? Will Scotland's research-intensive universities be able to maintain their excellence? If the cap on fees is lifted south of the border, the prospect of a two-tier system is a real one: a prosperous English system with a guaranteed income and a down-at-heel Scottish system subject to the whims of public spending. A poorly funded university system would be unattractive to both academic staff and students, particularly lucrative international students.

For the sake of Scotland's universities, let's hope the road to independence doesn't prove to be a cul-de-sac.