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: Higher education policy is a subject drawing together political and educational questions, and also more profound questions about the purpose of universities and their value to society. This study is offered at a time when these matters have become the subject of heated political debate and are, for the first time in history, of widespread popular concern. Government policy has been driven in the last decade or so by a determination to ensure that the work of universities benefits society and costs as little public money as possible. At the same time, universities have been encouraged to seek funding from industry and business. All this has gone forward with little thought about the consequences, though there have been some well-publicized episodes questioning the reliability of research funded by a business which thought it was buying the results it wanted. Government pressure has also sought to force universities to alter their management structures so that they behave more like businesses, interfering in their organization of their own affairs, while calling for a lighter regulatory burden. Among the universities which have been most affected is Cambridge. This is a study which takes stock of the debate, giving an insider's account of the recent history of the University of Cambridge within this wider context. It seeks to make a contribution to both the history of the University, which is told here with considerable frankness, and to the process of analysis which is now needed if Government policy is to be evaluated and adjusted, so as to protect the lasting contribution of universities to society.