One of my jobs as rector of Edinburgh University is to warn them and welcome them – all 7000 of them from 130 countries. At times like this, you realise that Scotland’s real business nowadays isn’t finance or manufacturing but higher education. Since the Scottish banks blew themselves up last year, universities are the only thing we still do now that is still genuinely regarded as world class.

So, I tell the students how Edinburgh is one of the world’s leading research universities attracting record funding. I tell them about the Scottish Enlightenment, Smith and Hume, Burke and Hare, Dolly the Sheep, and, with some trepidation, about the Scottish egalitarian tradition in education, which goes back to the Reformation, and which made Scotland the best educated country in Europe. With some trepidation, because I’m only too aware that these international students, or rather their parents, are paying up to £15,000 a year in tuition fees to come here. No egalitarian education for them. Edinburgh is by no means alone in relying increasingly on international students to help pay the rent.

But you have to bite the bullet: if free higher education is right, you have to argue the case for it, especially among those who don’t benefit. I explain that the Scottish Parliament voted to abolish up-front university tuition fees in 2001 after very wide consultation and on the advice of the Cubie Report, and that the present SNP government abolished the graduate endowment as a manifesto pledge. There’s no free lunch. The Scottish Government makes up the difference out of general tax revenue. However, there is – or has been – a consensus in Scotland that higher education should be free and that this is in line with the Scottish egalitarian tradition, the democratic intellect. We don’t want university entrance to be based on ability to pay.

Or at least, we didn’t. Because I can’t help being aware that the consensus is under greater strain than at any time in the past decade. It is increasingly difficult to find people in Scottish universities who will vigorously defend free higher education. Last week Lord Sutherland, the former principal of Edinburgh University, called for fees to be reintroduced to prevent Scottish institutions losing ground to English universities.

I was dismayed to discover, at the Universities UK conference in Edinburgh last week, that the Scottish system is regarded by many in the university establishment, north and south of the border, as a dangerous anachronism that could lead to Scottish universities becoming second-class establishments handing out devalued degrees. I’m not quite sure what they base this on since Edinburgh is as well funded as any university in the world.

Most Scottish university principals avoid talking about fees because they don’t want to get political, but privately a number of the newer ones are saying that the return of tuition fees is inevitable. Once the £3000 a year cap is lifted on the top-up fees English universities can charge – which everyone sees as inevitable whichever party wins the next General Election – Scottish universities will be in deep trouble. Right now the Scottish Government makes up for tuition fees on a per capita basis by paying Scottish universities the equivalent of the fees that Scottish students would have paid. But once English universities start paying variable fees, the argument goes, Scotland will be in a bind. If some English elite universities are charging £30,000 or £40,000 a year, how will the Scottish Government be able to match the funding when public spending is being cut?

Now, of course, no-one wants to see Scottish universities plunged into penury. But what annoys me about this line of argument is that it isn’t a reasoned case against the universal principle in higher education but

simply a capitulation to the privatisation of it. This crisis is coming precisely because elite English universities are about do to what critics of tuition fees always said they would do: which is charge ever higher fees based on their market value. The lifting of the cap on tuition fees will simply turn English universities such as Oxbridge, and UCL into the equivalents of Eton and Westminster. University entrance will be based on ability to pay. There will be some scholarships for the poor, of course, to justify charitable tax status, but make no mistake: variable top-up fees mark the end of universal higher education. Is that really what we want?

Scotland is being forced down a road it never chose to travel and I hope it will resist. If the day ever comes when Edinburgh University is charging Scottish, or even English, students £30,000 a year in fees, I will not be in the rector’s chair because it will have become just another bastion of privilege. An intellectual finishing school for the wealthy – and if that is the politics of envy, so be it. And, yes, I do know that Edinburgh is a pretty middle class establishment right now, and that not enough students from poor backgrounds go to university in Scotland. But the situation will be a hundred times worse if Scottish universities start charging what the market will bear. Look at Edinburgh’s private schools – also charities – and they only charge fees of £9000 a year. Do we want universities to be the same? That’s what we are looking at if we go down this road.

Yes, the present system is clumsy. English students and international students pay top-up fees; Scottish and EU students don’t, which doesn’t seem to make sense, but is a reality of EU law. Perhaps some kind of graduate tax, based on ability to pay, is the sensible way to ensure that those who benefit from higher education pay their share of the cost. I wouldn’t necessarily argue with that, but that is not what is on the table. Scottish universities have a gun held at their heads and they are rapidly losing their will to challenge the new elitism.

They need to rediscover their self-confidence. After addressing the international students and parents I spoke to many of them over coffee in the Playfair Library. Not one complained about paying fees, and everyone who voiced an opinion said they wished that they had free higher education back home. This argument can be won. But it will require some of that celebrated democratic intellect we talk about to make the case.