The glorious Glastonbury Festival has come and gone again, and the West Country says goodbye to its pilgrim backpackers. But while the big music jamborees make headlines, a quieter revolution has occurred around literature festivals.

There is no doubt that such festivals, mushrooming and drawing in large enthusiastic audiences everywhere, have become the cosmopolitan and internationalist debating societies, political hustings, Open University-style summer schools and adult education classes of our age. Despite the virtual worlds in which we are all said to be living, many people - admittedly mainly white, middle class and middle-aged or older - yearn for live intellectual stimulation and want to celebrate and interrogate new as well as celebrity writers.

Established festivals such as Edinburgh, Cheltenham and Oxford are being jostled by lively new ones in small towns and villages across the UK. The larger ones now have offshoots in other countries, while the major TED international thinkers' forum, for two decades held in Long Beach, California, ran a smaller version last month in Oxford.

As with those much-loved but numerically declining continuing education classes, audiences pay modest amounts for high-quality speakers and debates, while enjoying a bit of showbiz glamour at the authors' book-signing tents. Universities have recognised that festivals are great sites of regional public engagement and the sharing of scholarship and research with broad heterogeneous audiences, free from the pressures of teaching and research monitoring. From Aberdeen to Huddersfield and East Anglia, universities have even established their own festivals, often in conjunction with local councils and businesses. The Ulster Bank Belfast Festival at Queen's is an example of a partnership that has enhanced the university's commitment to cultural development in Northern Ireland and increased local economic prosperity and tourism. The University of Dundee's Literary Dundee has Apex Hotels as a major sponsor, while Waterstone's supports many others.

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But as government funding cuts begin to bite hard and the Arts Council, local councils and the business community are modelling up to 40 per cent budget cuts, the pooling of sponsorship, resource, personnel and venue becomes urgent. Journalist Boyd Tonkin expressed the fears of many in the arts that the "real red meat of cuts to the bone" soon to be imposed on arts funding will badly affect small but important regional events (his example is the Ledbury Poetry Festival). So this is where universities come in.

Literature (as well as science) festivals have long relied on the academic community for speakers and chairs, ideas and contacts, keynote lectures, design facilities, publicity, board membership and so on. For scholars who are already media darlings, this is merely an extension of appearances on In Our Time, the Today programme, and the pages of the broadsheets and weekly journals. But for others, this may be their first toe dipped into a generalist world of "edutainment", bringing them into contact with a multigenerational, sometimes mixed-class and mixed-race body of enthusiasts.

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Cambridge is the best-known example of a university that not only runs two major festivals of its own - science and literature - but also now contributes to the Hay Festival. Since Cambridge's 800th anniversary in 2009, Hay has run a successful slate of lectures in association with the university, on topics of general interest from Jane Austen to the body beautiful, fielding both international figures and young and sparky historians, philosophers and scientists. These lectures give Hay greater intellectual bite, Cambridge a popular platform and bring an increase in the number of women speakers at a festival accused of male dominance.

The South West peninsula - often seen as a bucket-and-spade family holiday destination - hosts a huge number of festivals, fairs, carnivals and fetes of all kinds, particularly during the spring and summer. Known primarily for commercial and community agricultural shows, horse, dog, flower and craft fairs, Cornwall and Devon now boast one of the UK's highest percentages of creative people and businesses. As a result, they have also been building a reputation for arts and culture festivals, designed for the artistic communities within the counties and the cultural visitors who increasingly take short breaks away from the beach.

There is the long-established highbrow Ways with Words at Dartington, the funky Port Eliot Festival, music festivals from Sidmouth Folk Week to the St Ives September Festival, and multi-arts festivals from Bude to Falmouth. Since culture is crucial to Cornwall's prosperity and international reputation, it has for some time been heading the European Regions of Culture (EROC) campaign, for which it has led a pilot project.

The University of Exeter has collaborated informally with festivals in Bath, Budleigh Salterton, Cheltenham and St Ives. But the Daphne du Maurier Festival of Arts and Literature, which Exeter may be said to have co-founded, is to my knowledge one of only two annual British festivals named for a woman writer (the other is Torbay's Agatha Christie).

In the mid-1990s, Daphne du Maurier's son Christian Browning moved into Ferryside, the house acquired by the du Maurier family in 1926, where his mother began to write. A small group of local council officials and Exeter academics discussed with Browning the possibility of staging an international literature festival in Fowey named for his mother, incorporating literary talks, du Maurier-themed walks around the coastline and community events from drama to music.

The first festival was held in 1997, with a simultaneous academic conference on the work of Daphne du Maurier and Cornish writing about place. This marked a collaboration between the new festival and the university's three departments in that county. Since then, both the festival and the university's Cornwall operations have grown. This year saw the 14th and most successful festival, and the university now has a purpose-built multidisciplinary campus, Tremough (shared with University College Falmouth), with an expanding student population.

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In 2007, the centenary of Daphne du Maurier's birth, the Exeter Cornwall campus' main building was named after the writer and the centenary festival included an international academic conference, with an invited reception by the du Maurier family at Ferryside and a special edited volume of the journal Women: A Cultural Review.

At the Daphne du Maurier Festival 2009, Cornwall-based academics ran a successful series of literary talks in the Fowey Town Hall, known as the "Exeter University Sessions", covering topics such as Sabine Baring-Gould and his werewolf stories, Cornish women scientists and William Golding. This year, the university launched its Arts and Culture Strategy, aimed at closer formal relationships with the arts community with which its research and teaching have long engaged.

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The festival was part of its Cornwall profile-raising. More sessions were held, together with life writing workshops; Fowey Hotel hosted a specially composed play about Gerald du Maurier, Peter Pan and the young writer Daphne; and, as an extension of the festival's geographic reach, the Tremough Campus held a day of events on subjects ranging from John Keats and the West Country, myths of wrecking and piracy, and Laura Knight and the Newlyn School, with Sarah Dunant and Louis de Berni¨¨res as star turns.

This is a moderately sized 10-day festival on a small site, funded mainly by Cornwall Council but also supported by bookshops, Virago Press and local businesses. As part of the council's budget review (even before the draconian cuts were announced), an economic impact study of the 2010 festival was commissioned, the results of which will feed into deliberations about future funding.

In 2009, the National Coordinating Centre for Public Engagement held a seminar on universities and festivals, gathering evidence and ideas about the relationship between the two. The NCCPE has established with the University of Cambridge a Festivals Research Project to explore the involvement of students in festivals, and devise models for effective engagement. The aim is to develop case studies, provide a research toolkit for public engagement ambassadors to use in evaluation of festival activity, and create short-term student volunteering opportunities.

One example at this year's festival was a recent Exeter English graduate, Beatrice Underwood, who gave a well-attended talk on popular novelist Rosamunde Pilcher's fictional Cornwall and its huge impact on German tourism to the UK.

It may seem absurd at this sober time to advocate the growth of university-supported festivals. Threats of large cuts across the public sector, with the Arts Council and universities having ruthlessly to prioritise, may suggest a retrenchment of non-essential cultural activities. But as the Arts Council chair, Liz Forgan, has reminded us, recessionary times are precisely when the arts come into their own and are more vital than ever. Like other kinds of cultural event, festivals can raise spirits, offer platforms for debate and refocusing of future possibilities, and bring together international artists and audiences to refresh our imaginations.

The literature festival - even if often criticised for its predominantly white, female and ageing audiences - has a large and growing popular appeal to the general public with which universities must remain in dialogue. In hard times, arts organisations are eager to work together to maximise resources and maintain high-profile events, especially outside London, in the run-up to the Olympics. The demoralising disappearance of essential funds and sponsors can be countered by university-led or -bolstered initiatives that support local, regional and national communities to struggle through the lean months and years to come.

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