New technology opens up a host of intriguing prospects such as home banking, video on demand - and a University of the Highlands and Islands. The UHI is conceived as a high-tech network of the region's 12 further education colleges and specialist research institutes, with an advanced digital telecommunications network underpinning the delivery of education across an area bigger than Belgium.

11 = /But there seems to be a basic flaw in this ambitious scheme. Given technological advances, and the fact that mainstream institutions now routinely offer distance learning options, what is the point of the new university? Why should higher education in the Highlands and Islands not be offered through existing universities?

The Open University, a pioneer of education in remote areas, has been well established in the region for many years, and a number of others, such as Stirling and Aberdeen, offer undergraduate and postgraduate courses.

The UHI project is by no means spurning these initiatives, and sees them as crucial to the evolution of higher education in local institutions. But it sees a local identity, with readily available tutors, as equally essential. It believes that large numbers of potential students fail to take up existing options because they fear the support networks are not strong enough - and at present, many young people leave the region to study, exacerbating the problem of depopulation.

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The Scottish Office apparently agrees that despite university outreach, there is still significant unmet demand, since it recently lifted the cap on higher education places in local further education colleges.

It is not too fanciful to see the scheme as a mirroring on a microcosmic scale the break-up of the nation state, a phenomenon visible all over Europe. The project's supporters want UHI to offer a full range of degrees, not only those available at universities elsewhere, but specially tailored courses that tap into local concerns such as rural development, Gaelic culture and forestry.

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This is far from being sentimental regionalism. Scottish universities have traditionally been much closer to their local communities than those elsewhere in Britain. At the moment they are publicising their role in local economic development. Studies for the project claim it would boost the region's economy by around Pounds 70 million per year, creating more than 1,000 jobs. The Highlands and Islands Enterprise, the area's development agency, sees the university's specialist skills as a magnet for inward investment.

Provisional estimates by the project's financial consultants suggest UHI will need capital investment of around Pounds 34 million over five years, with another Pounds 8 million for information technology equipment to create an electronic campus which links tutors and students across the region. A bid for Pounds 25 million is currently with the Millennium Commission.

As the region's young people continue to move south, the question may not be whether the Highlands and Islands can afford to have a university, but whether they can afford not to.