Phil Baty talks to Will Hutton, the Observer editor who has recently added an economics professorship to his portfolio. Will Hutton, editor of The Observer and veteran economics correspondent, has been widely credited for unleashing the nebulous economic policy sound-bite "stakeholding society" on to an unsuspecting business world.

His appointment this month as visiting professor of Manchester Business School will enable him to take his ideas directly to business chiefs and proselytise to the next generation of executive decision-makers. And he will no doubt sell a few more copies of his bestselling social and economic critique of Britain, The State We're In, along the way.

Hutton's clear about what he wants from the new relationship. "I want to roll the stakeholding stuff forward," he says. "I expect it will open doors for me with small and medium-sized businesses in Manchester. It is an opportunity I should seize. I want to use the position to advance my ideas over the next three years, And get some research done in the territory." So can Manchester expect regular visits from Mr Hutton? "I expect I'll go up one or two times a term," he concedes. "But I'm free each Monday."

Manchester Business School, of course, gets an instant celebrity. MBS director of research Peter Swann is also clear what he wants from the partnership. "We're thrilled," he says. "Hutton's book made a great impression - even those who don't like it would have to agree. Obviously it's a privilege to have any major newspaper editor as part of the team. One of the missions of the school is to get research out to a wider audience and to learn to talk about it in a way that appeals, which is not always something we get time to do."

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So can the academic community take a journalist seriously? Hutton certainly thinks so. "I'm genuinely looking forward to forming a relationship with the faculty members and students," he says. "I do quite like the world of academia." His degree in economics and sociology from Bristol in the early 1970s was followed by six years as a stockbroker, an MBA at Insead, in Fontainebleau in 1977-78 and then journalism, including spells at the BBC's The Money Programme and as economics correspondent for Newsnight.

But it was the five-years between 1990 and 1995 as economics editor at The Guardian that Hutton really topped up his academic credibility. "A lot of my Guardian commentary was based upon my reading of academic journals and books sent to me," he explains. "I made the job a link between what academics were saying and the current economic policy - 'This is where the debate on inflation has moved now, folks'."

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Hutton lists London School of Economics director, sociologist Tony Giddens, among his heroes and he has been reading political theorist David Marquand, of Mansfield College, Oxford, and the former professor of literature, Marilyn Butler. "The group of academics around the Oxford Review of Economic Policy is very good," he says. "And the Cambridge Journal of Economics is doing interesting work."

Hutton's work, say his new MBS contemporaries, develops a long tradition of academic thought. "John Maynard Keynes once said: 'practical men think they've discovered something new when in fact it's the voice of a defunct academic scribbler'," says Swann. "New populist ideas are often found in old academic ideas," he adds. Swann sees Hutton's work in the 1950s tradition of Edith Penrose, who left a lasting impression on Hutton, he admits, when she taught him at Insead. "Penrose revolutionised the way we think about the firm," says Swann. "She showed that it should not just be running for the interest of the shareholders. It's a more complex social entity." "She was very influential," adds Hutton. "She started the early stakeholding stuff."

Hutton was inspired to take the post and hold his ideas up to academic scrutiny by what he sees as a "revolution" in economics. "There was a huge over-emphasis on mathematics in economics," he says. "I can understand how academics want to button things down, but it creates artificial restrictions. There's some quite frankly ludicrous bits of work where the researcher might as well have been translating a remote Latin poem. It doesn't tell you anything about the real world. I want to get at the dynamics of a modern market economy." A revised academic approach to the subject, he says, has enabled nebulous ideas to take shape and allowed stakeholding to be examined seriously. "Economists are weary of the accusations against them, and are anxious to shed the mathematician image. They are beginning to become more interested in looking at the real world - how to regulate the water industry; the best way of borrowing for long-term investment - this is the exact territory I want to get involved in. There is a growing number of political economists like John Kay and myself who are marrying academia with pragmatism."

He acknowledges that the practical implications of his grand theories need further investigation, and that a lot of stakeholding questions remain unanswered. "There is no point pushing ideas that the business community feels are unworkable," he says. "How will a small business construct a stakeholder board?" he asks. "How will stakeholding affect internal discounting strategy? What are the legal changes necessary? If you are committed to your workforce, how do you marry job security with the right to move people or the right to ask them to leave? How will the change be managed? All these questions have to be answered."

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Hutton expects a change of government will really open the stakeholding debate to more research and scrutiny. "It is simple stuff, stakeholding," says Hutton. "I'm after the same thing as Tony Blair. It's about treating people properly, it's about an inclusive welfare system and fair-mindedness. But the contentious part is how to represent this. I say the principles should be embodied in the law - to have a constitution that embodies the values. But Blair doesn't want to frighten the horses in the British business class. I'm prepared to be hard about how to achieve it." Scepticism about the practical implications of stakeholding have been greatly exaggerated, and misrepresented by his rightwing critics, believes Hutton, who insists he has a great deal of boardroom support behind closed doors. "Once the Tories have lost the election and the dust settles, the whole thing will change."