Education at Britain's state-run universities (that's basically all of them) used to be free. Indeed, the state gave you a 'maintenance grant' to pay your living expenses. To many, it was a three-year holiday, paid for by the state, and the universities found them queuing up for it. But taxpayers' pockets are not so deep, and a few years ago the maintenance grant was replaced by a student loan system. But the courses themselves remained free to UK students.

Whereupon - this isn't rocket science, is it? - the universities started recruiting more and more students from overseas, because only they could be charged the full cost of the courses they took.

But still the books didn't balance, so the Blair government said it would allow universities to charge fees. Not at market rates, of course: that would be unfair. Just up to a maximum of £3,000 a year. Whereupon - obvious, again - most did indeed set fees at this maximum figure.

Even so, they are overstrained. Cambridge University says that charging students £3,000 a year will not safeguard its future. Its annual accounts published this week show that the university is nearly £17 million in the red, with teaching and research losing £15 million.

The solution? As long as the universities are in thrall to government, they will never be free from political interference and will never be allowed to charge what their product is worth. It's really time for a velvet divorce from the state. Charge the market rate, build up capital endowments to help poor but able students, and serve your students: not the politicians.