When a terrorist plot to bomb up to ten aircraft travelling between the UK and the US was uncovered and foiled in August 2006, transatlantic air travel was severely disrupted. For most people, the incident caused frustration to holiday and business travel plans. But for the semi-rural Buckinghamshire town of High Wycombe, it also left a scar on the community. Counter-terrorist police raided local homes and arrested a number of residents, creating an atmosphere of suspicion and fear.

"I live in the same road where two of the men who were arrested lived," says the Reverend Mary Gurr, of St Alan's and St Peter's Church. "There was a sense that these are people who have lived among us for a long time, so it was shock and sadness. I thought there was going to be a terrible backlash."

It is a scar that Bucks New University is attempting to heal. The university is hosting a new council for Christian and Muslim relations - chaired by Chauhdry Shafique, its director of equality and community cohesion - which aims to develop inter-religious dialogue and consensus about ideas of citizenship. Gurr is just one member of this council.

"Following on from 9/11 and then 7/7, there has been quite a strong shift of focus in terms of how we try and live together as different faiths," says Shafique. "Its (the council's) purpose was really to get together and reflect on what's happened to Wycombe and how we might deal with it."

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Shafique is clear that universities across the country are central to the community cohesion debate, and that the campus in Wycombe can offer a natural home to the council, especially as it has strong track record of working with community organisations.

"It gives the council a certain kudos," he says. "I think there is a realisation that this is an important and an urgent kind of work. In the medium to long term, I see this project as being one of the most critical social and cultural issues of our time. It's one that we have to get right for the long-term stability of our country."

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The Reverend David Picken, the council's vice-chairman, says it is essential for the university to play host to the council because it offers a genuinely neutral space within which to discuss very difficult, and often incredibly sensitive, issues.

"It's fairly evident that in the Western educational tradition we have an appropriately liberal understanding of what education is about," he says. "Because we have all come from that tradition we have confidence in the university. This is the right place for us to be."

"If we're going to counter some of the more alarming aspects of extremism in our world, and indeed bigotry, then we all feel that education is going to play a clear part in that."

The creation of the council is timely - it comes as higher education is being criticised for its lack of engagement with society and issues of cohesion.

David Conway, senior research fellow at the Centre for Social Cohesion (founded by the think-tank Civitas), has claimed that British universities are suffering from "complacency in the face of the very real threat" of extremism on campus.

And in his damning Government-commissioned report on Islam in British universities, Ataullah Siddiqui, director of the Markfield Institute of ³ÉÈËVRÊÓƵ, says that universities should offer Islamic studies modules as elective courses to all students in an attempt to foster greater understanding between students and produce culturally aware graduates.

"Wherever it is possible, departments should be fully resourced to provide such add-on modules," the report says.

At Bucks New University, the council has already received political backing. Hazel Blears, the Secretary of State for Communities and Local Government, attended its launch at the end of last year, and local Conservative MP Paul Goodman has recently, and rather conveniently, been given the community cohesion brief and is in full support of the university's work.

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Bucks New University is not the only institution responding to the Government's call for support in promoting community cohesion. In 2004, a partnership of four universities - De Montfort, Warwick, Coventry and Leicester - set up the Institute of Community Cohesion (iCoCo). The institute conducts research into how best to promote cohesion and produces guidance to help local authorities and other public services to achieve this goal.

Ted Cantle, chairman of iCoCo and associate director of the Improvement and Development Agency that helped set up the institute, agrees that the universities' neutrality means they are best placed to lead the cohesion agenda.

"I think that we're really just trying to build capacity and understanding," Cantle says. "I suppose part of that is about trust and giving space for reflection, and hopefully our independence and objectivity do set us apart."

The institute is focused on practical outcomes. Its research has produced, for example, a "tension monitoring toolkit", which it claims can help authorities identify problems arising in a community up to two years before they escalate into a crisis. "We don't do any research unless we can be fairly confident that policy is going to be informed and practice is going to change as a result," Cantle explains.

As well as hosting conferences, lecturers and researchers are touring the country to speak to communities about their own experiences. "It's not people coming to us for that debate - we take the debate out to them."

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Although Cantle is passionate about the neutrality of the institute, he says that the higher education sector cannot take the place of councillors and politicians in informing the cohesion debate. "I don't think there is any replacement for local elected leadership."

But, he says, with the higher education sector's help, councillors who were previously passive about community relations are becoming confident and competent in dealing with the issue.

The institute is attracting growing interest from universities abroad. "The idea of community cohesion is a relatively new concept and it seems to be gaining ground. It does have resonance, particularly in places like Canada and increasingly in Europe, too."

The next step, Cantle says, is to produce an international database of good practice in community cohesion.

Deian Hopkin, vice-chancellor of London South Bank University, believes the pivotal role that higher education institutions are now playing in hosting and addressing such complex debates about society is a sign that the sector is maturing.

"Universities are evolving," he says. "We're really changing - we're not simply businesses, we've become part of the social and economic structure of the community. That in itself doesn't produce community cohesion but it's a facilitator.

"If you believe that one of the sources of social dysfunction and social malaise is the lack of opportunity - the lack of economic opportunity - the university can help."

As well as being a major local employer, the university is also a provider of services. Nobody is surprised that universities are contributing to the community by, for example, training nurses who go on to work for the local health service. For Hopkin, the act of hosting a faith relations council or providing a neutral space for discussion is just the next step.

"I think we have become more aware of the potential for universities to be engineers of social and economic changes as well as simply part of the educational process," he says. "They are the leaders of progression for local people.

"In recent years, universities have seen more benefits from becoming part of the strategic landscape, not simply (being) an institution like any other. We're not there to simply produce graduates. We're there to contribute to the economic and social wellbeing of the area."

Such opportunities also offer a chance for universities to cement their position in the community. "We can't just rely on grants from the ³ÉÈËVRÊÓƵ Funding Council for England any more. We have to be much bigger, and that means we have to look at ourselves rather differently," says Hopkin.

Caroline Gipps, vice-chancellor of the University of Wolverhampton, says the issues should be approached with more caution by those in higher education. Universities have become more engaged with community cohesion because of the political debate about terrorism and on-campus religious extremism. She worries that these links have been over-emphasised, and that universities must individually decide how to engage with their community.

"Because we (the University of Wolverhampton) are part of the community, it is critically important that we do what we can to be a part and help to promote a cohesive community, but I'm not sure that all universities see it as a part of their role. If I were the vice-chancellor of Oxford, I might see my job as a national facilitator rather than a local facilitator."

But she adds: "There is no doubt that universities are determined to make sure that we maintain the sort of academic debate and openness that allows people from every background to discuss priorities, values and ideas."

Back in High Wycombe, local people are said to have welcomed the formation of the faith council at the university and are waiting to see what impact it will have, both on the community itself and on the work of higher education.

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"I think they are looking forward to this. It's always the community on the ground that suffers the most - they get the backlash," says council member Imam Sultan Mahmood. "They want something good to come out so that everybody feels secure."