For Michael Kelly, director of the Subject Centre for Languages, Linguistics and Area Studies, the message is simple: "British-educated people lack the language skills to operate in a global environment."

Only 2 per cent to 2.5 per cent of students choose modern language degrees, and perhaps a similar proportion take languages as part of a broader programme, while others try to make up the deficit through extracurricular programmes. Although figures for the last category are not easily available, Kelly estimates that just 6 per cent to 7 per cent of British graduates leave university with "survival skills" (or better) in at least one foreign language, while only about 5 per cent are really able to function effectively. There are dozens of reasons for thinking this a very worrying state of affairs.

In a recent position paper entitled Language Matters, the British Academy (BA) stated that it "has for some time been concerned about the state of foreign-language learning in the UK at all levels, and has drawn attention to these concerns in various ways, including submissions to Government".

Given its remit, the BA focused on what this means for the research base in the social sciences and humanities. It is not a pretty picture. Present trends, the report indicates, "may damage the internationally recognised distinction of UK scholarship within the humanities and social sciences and the ability of UK-born researchers to contribute to international projects".

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However serious the impact, it is only one aspect of a general malaise in which "a whole generation risks being 'lost to languages'". The report concludes that this "will have a major adverse effect on the ability of the UK (and its citizens) to respond to many of the major challenges it faces today".

The basic facts are not in doubt. In 2004, the Government, in its wisdom, decided to make languages optional for pupils from Key Stage 4 (ages 14-16). Official thinking seems to have been driven by a "choice agenda" that has had little influence elsewhere in Europe - and a desire to crack down on truancy. (Would kids bunking off school ever be persuaded to turn up if it meant having to confront French irregular verbs?)

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The impact has been dramatic. The proportion of schoolchildren doing no languages at all at GCSE has increased sharply - from 22 per cent in 2001 to 56 per cent in 2008. And this has had an obvious knock-on effect at A level, with a decline in numbers in French and German of 47 per cent and 44 per cent respectively between 1996 and 2007.

Yet such changes are not spread across the board. The BA report points to "the failure of many state schools to promote language learning as effectively as do private schools". Pupils from more privileged backgrounds are, it says, "much more likely to have a language qualification".

At university level, after a dip in the 1990s, the absolute numbers of those studying modern languages in universities have remained reasonably static. (Something similar applies to the related case of linguistics degrees - see box on page 35.) Yet the BA notes "the closure of as many as a third of university language departments in seven years" and "regions in the UK where there is virtually no substantive ÖйúAƬ language provision".

Such patterns raise a number of important issues. The first is about access. Poorer children tend to get less chance to develop competence in foreign languages at school now that they are no longer compulsory, while the significant minority of students who need to live at home during their university years may simply not be able to find courses in, say, German within their local region. This is obviously unfair if it means they miss out on acquiring marketable skills, but Kelly believes that the impact on their futures goes deeper, since language degrees - which often include a year abroad - offer a number of other cognitive and developmental advantages. These are likely to be personally enriching, while also enhancing employability.

"Those with languages are comfortable travelling the world," he explains. "People without languages feel disarmed, disempowered. Once you can speak their language, some of the mystique of foreigners goes away and you feel less threatened by them." Kelly believes that restricting access to languages among people of lower social classes has the effect of "parochialisation" and compounds what he calls "the increasing inequality of British society".

Another important area under threat is research. In linguistic topics, this has become focused in relatively few pre-1992 - and particularly Russell Group - universities, and is expected to suffer significant funding cuts in response to the latest research assessment exercise results. (While language teaching is protected because of its "strategic national importance", this does not apply to research.)

Even more serious is the threat to research projects in the social sciences and humanities that require knowledge of foreign languages. As reported in Times ÖйúAƬ on 11 June, Richard Evans, Regius professor of modern history at the University of Cambridge, has recently raised concerns about whether a new generation is emerging to carry on the great tradition of British historians who have produced major work on just about every country in Europe. Many of the central policy issues of our time relating to security, crime, healthcare and the environment require both international collaboration and serious comparative analysis. While British universities have had some success, at least in the short term, in attracting top-class research talent from abroad, English-born and educated monoglots are likely to be increasingly unable to contribute to crucial debates.

And what about more general language skills shortages? Although the numbers of graduates in modern foreign languages have not declined in the immediate past, Kelly believes we are not training enough high-level linguists for the future. The United Nations and other international organisations complain about the lack of native English speakers with the skills to become translators and interpreters. The military and security services are equally eager to get their hands on people with the right languages. And there are numerous vacancies on PGCE courses for language teachers. This shortage is leading to a number of non-British people coming to train here, which may work as a stopgap but will not solve the problem because many choose to return home after working in Britain for a few years.

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Apart from the question of whether our educational system is producing enough interpreters or spies, there is a far broader question of whether enough of us have even the basic levels of fluency needed to operate in a global environment. There is no point in moralising about this. Learning a language takes time and effort, and the student needs to be motivated. Whether the main motive is to read scientific textbooks, listen to pop music, chat to "the natives" while on holiday or acquire a trading partner, the basic laws of supply and demand mean that it will always make more sense for a Dane to learn English than an anglophone to learn Danish. The purely rational and self-interested factors that push much of the world to learn English do compensate, to some extent, for British linguistic laziness. And, from the point of view of an individual's career development, it may often be more useful to gain a marketing qualification than to try to learn Chinese.

Yet lobbyists for languages have long argued that because of our monolingualism, this country is shooting itself in the foot, missing out on lucrative joint ventures and export deals. Many businesspeople believe that their companies have been held back by a lack of linguistic abilities, and it is easy to point to some of the anomalies, such as the fact that an NVQ in leisure and tourism doesn't require any languages.

Until recently, while British growth rates were reasonably buoyant and unemployment rates reasonably low, there was limited purchase in the notion that our lack of language skills was ruining the economy. But the recession may be bringing to the surface underlying structural flaws we have ignored for too long.

There is evidence that, aside from the impact that factors such as distance, currency differences, historical links and regional groupings have on the volume of trade between countries, linguistic barriers also have an effect - it is obviously far easier and cheaper to do business with people one can talk to without intermediaries. James Foreman-Peck, an economist from Cardiff Business School, notes that lost opportunities and additional expenses incurred, for example, by employing agents, translators and interpreters can increase the overall cost of doing business quite significantly.

"Language is a major obstacle to international trade, amounting to an overall 'tax' of 5 per cent to 10 per cent," he says. "Where linguistic barriers are absent you get more trade."

Investment in languages tends to increase exports, which, in turn, is usually good for productivity.

It is a commonly held belief that the universal English-language effect (the fact that so many people from other countries speak English) compensates for our lack of foreign language ability, and British businesses can effectively ride on the coat-tails of the rest of the world. But in 2005, Foreman-Peck's calculations showed that this dramatically underestimates the impact of our linguistic inadequacies. "Raising British standards of language competence to the rest of the world average," he concludes, would amount to a "tax" reduction on British trade of between 3 per cent and 7 per cent - representing "minimum possible gains from optimal investment in languages for Britain" of ?9 billion.

If such arguments are broadly accepted, it makes a case for diverting substantial amounts of public money to addressing the British linguistic deficit. What is on the table at the moment, however, sounds like very small beer (see box, page 32).

In calling for "a joined-up approach on the part of government departments", and concluding with a number of recommendations, the BA frankly - and depressingly - admits that it is reinventing the wheel. It applauded the arguments of Languages: The Next Generation, the final report of the Nuffield Languages Inquiry, published in 2000, which called urgently for "a national strategy to plan the range of languages taught in ÖйúAƬ, to manage the integration of languages into all subject areas and to maintain a sufficient supply of language specialists".

One good idea, the BA suggested, would be for the Nuffield report to be "brought out of the filing cabinet and implemented with the utmost speed".

Not too late to learn? the efforts to cultivate fluency in another tongue at university

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The British Academy report Language Matters notes that "other countries have increased the extent to which secondary school pupils and university students are obliged to study foreign languages".

In the UK, by contrast, though the Government is "in the process of introducing a programme of, at present, voluntary, and from 2010 mandatory, language learning at primary level, any beneficial effects will take many years to show through at higher levels".

If this is an argument for some joined-up, long-term thinking, it could hardly have been put forward at a less auspicious time. When the report was launched on 3 June, David Lammy, the ÖйúAƬ Minister, spoke eloquently about the variety of languages spoken in his Tottenham constituency and how his own life had been enriched by learning languages. He frankly admitted the inconsistencies between policies for primary and secondary schools. But with an impending Cabinet reshuffle, and in the midst of one of the biggest political crises for decades, he also made it clear that he was hardly able to look ahead beyond the end of the following week.

One recommendation put forward by the British Academy, which would also have an indirect impact on secondary schools, is that "a language requirement (or equivalent) should be a requisite for university entrance, or at least for completion of degree study".

Something along these lines is supported by Jocelyn Wyburd, executive director of the University Language Centre at the University of Manchester. "I believe that several European governments require evidence of proficiency in at least one language other than the national mother tongue as prerequisites of 'graduateness'," she says. There is no reason why British universities shouldn't also require language courses to be taken alongside studies in professional vocational areas, she continues. "Our education system should expect all young people to take a language throughout their education and training career. At least one, preferably two. There shouldn't be a choice."

In many European countries, it is common for degrees to include a high-level language component, and not unusual for them to be taught entirely in English. Another option is to promote courses in which training in linguistic and professional skills are inextricably intertwined.

The Grenoble Ecole de Management, for example, is introducing a trilingual study track on its masters-level grande ecole programme, based on the principles of Content and Language Integrated Learning (CLIL). While about 400-500 students currently take the course in French, and there are 100 places on an English-only stream, it hopes to attract 40 on to the new programme when it opens this September. In the trilingual option, half the course will be taught in English, a quarter in the students' native French (for, say, complex mathematical material), and the remaining quarter in either Spanish or German.

In the first instance, there will be fairly stiff linguistic entry requirements, which are likely to bring in mainly people from bilingual or international backgrounds, but this can obviously be extended if the programme proves a success. "While students learn the content," explains the programme co-ordinator, Nancy Armstrong, "they learn the language and vice versa. CLIL is more common in primary and secondary education. It remains a very innovative method in ÖйúAƬ. It's a dual-objective pedagogical process.

"Teaching in English alone, as if the students were native speakers, isn't an effective way of improving their English, since it only makes their reception better - just like watching Desperate Housewives on television.

"The CLIL methodology is all about classroom practice to encourage language learning. Lecturers are coached by the language department to slow down the rhythm, eliminate non-essential material, provide a broader lexical stock and systematically check for understanding, encouraging more interaction between student and teacher. The result goes further than learning the language, since it allows the students to take on board the concepts in a foreign language," she says.

A few British universities are trying to meet such competition. Malcolm Grant, provost and president of University College London, says our institutions must prioritise language learning among their students. "Universities have to seize our own destiny and mark out our own future. We can't just wring our hands over declining educational standards in schools." As well as acting as sole sponsor of a local academy school with a specialism in foreign languages, from 2012 UCL will require a C grade at GCSE in a language as an entry requirement. Those otherwise admissible without such a qualification will be required to take a half-course in their first year.

Grant justifies this initiative in terms of student employability, a general desire for his university to develop its "global role" and a specific commitment to increasing numbers who spend time abroad as part of their course. He also wants to make a stand and show that languages matter. However hard to live up to, these ideals are pretty uncontentious. It remains to be seen how other universities will rise to the challenge.

More than words: Can linguistics ever be sexy?

The future of linguistics as an academic discipline has recently come under the spotlight after a decision by the University of Sussex to discontinue its courses.

Yet for Paul Rowlett, chair of the University Council of General and Applied Linguistics (UCGAL), who also works as head of the School of Languages at the University of Salford, the overall picture remains healthy. "The historical data," he says, "suggest that the number of actual linguistics students has been growing... in part because of the success of the English-language A level, and the number of students coming through to ÖйúAƬ linguistics via this route.

"The traditional link between modern foreign languages (MFL) and linguistics has clearly been threatened by worrying levels of foreign-language study in the secondary sector... and there is some evidence that joint honours students are choosing subjects other than MFL to combine linguistics with.

"A number of institutions have now understood the pulling power of English language, and some are labelling linguistics programmes accordingly. There is further evidence of the health of linguistics in UK ÖйúAƬ from the research assessment exercise, where there are clear indications that more research is being done."

Degrees in linguistics offer a number of fairly obvious career paths. One is English teaching. Although the subject remains hugely popular at A level, Rowlett believes there is "clear evidence that many of the teachers asked to deliver the course, who traditionally come via a literary route, have really struggled with the concepts and techniques needed". He also notes worrying reports that "some English PGCE courses won't accept applications from linguistics graduates".

But teaching is far from the only option. In collaboration with the Subject Centre for Languages, Linguistics and Area Studies, the UCGAL is planning a profile-raising event in the autumn designed "to show a wider public how linguistics feeds into as wide a range of fields as education (applied linguistics), health (speech and language therapy) and crime (forensic linguistics)".

The last of these should silence any doubts that language-based disciplines can be sexy and exciting. Consider the work of John Olsson. One of the country's few professional forensic linguists, he is also an adjunct professor at Nebraska Wesleyan University, teaches at the University of Bangor and runs his own online courses (approved by the Open & Distance Learning Quality Council). His textbook, Forensic Linguistics, published in 2004, has recently been followed up by his 2009 publication Wordcrime: Solving Crime through Forensic Linguistics.

"Forensic linguists can be very useful," says Olsson. "We can use the techniques of conversational analysis in listening to interview tapes, looking for hesitancies, overconfidence, odd intonations or unusual phrasing. Some of the evidence is not admissible in court, but it can be very useful in pointing officers in particular directions.

"Idiosyncratic capitalisation, apostrophes or punctuation can help expose the fake suicide note, reveal the hidden message or uncover the authorship of anonymous hate mail. Every case is different, and it's a very data-driven process, so most assessments and analyses rely on us carrying out comparative research on huge corpuses of text messages or mobile phone conversations."

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As his book reveals, Olsson is often asked to work on cases of fraud, forgery and plagiarism, not to mention the occasional prison break or crime of violence. It is well known that the novels of Patricia Cornwell and television series such as CSI have led to hundreds of people queueing up to study forensic pathology. All we need is someone to make a film built around a charismatic forensic linguist and the image of university language and linguistics degrees would be changed for ever.