It is the year 2050. A bright young sixth-former is discussing her choice of university course with her grandmother. She is considering a degree in heritage studies.

"Is it really true that you did a course called history at uni?" she asks.

"Yes," her grandmother replies. "It looked at bits of the past."

"But what for?" asks her grandchild. "What was the point? Heritage studies is really useful. I want a job at a Heritage Trail agency when I've finished uni. History must have been so dead."

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Fantasy or the future? History today is at a crossroads; the debate about its "function", its purpose, has sharpened. As an academic discipline it is under assault from two different, although related, directions.

On the one hand there is the "democratisation" of history - history as heritage, a commodity whose primary function is to entertain and inform. On the other there is governmental pressure to make history socially useful, contributing in visible ways to the gross national product while providing the taxpayer with some public display of its utility.

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Those who are exerting these twin pressures are united in the view that history has to come down from the ivory tower and enter the marketplace if it is to survive. Where medical research, engineering, social studies, even languages have little difficulty in showing their value-added nature to the taxpaying public and government customers, history has no easy utilitarian rationale. It survives precariously only because tens of thousands of students want to study it. In a university world led by client choice, this is a difficult subject to consign to the academic scrapheap.

The democratisation of the past is not, of course, an entirely negative process. History is as capable of being appropriated as a commodity and a source of entertainment as any other discipline. The current "history industry" is in itself partly responsible for the huge appetite for the subject at university level. It is sometimes difficult for historians to recognise that history is everyone's property in a way that advanced research in the natural or social sciences is not.

There is much that historians can bring to bear on media representations of the past; no one advocates drawing an iron curtain between popular history and historical scholarship. Indeed, historians in Britain have for more than a century supplied an important bridge between academic history and the public - T.B. Macaulay, Thomas Carlyle, Arnold Toynbee, G.M. Trevelyan and A.J.P. Taylor are only the most glittering among them.

The difficulty arises when the public is asked to discriminate between popular (and populist) history and its academic relation. Popular history is held in high esteem currently because it is accessible, lively and, occasionally, genuinely interactive. Public confusion over what history is as an academic subject derives from the misperception that popular history and popular history writers are doing in some sense real history, while the arcane, theoretically driven and undramatic scholarship in university departments is bad history.

Popular history clusters around a standard set of themes - the Tudors, the Holocaust, the First and Second World Wars - or colourful personalities (Churchill above all, Hitler and Stalin not far behind), and little beyond that. Much popular history writing re-enacts the past. The search for engaging personalities, titillating narratives or dramas of operatic intensity engages with the tawdry obsession with celebrity.

The public's capacity to distinguish clearly between fact and fiction in this process is not very sophisticated, but in a sense it doesn't matter if the story is told in a novel or a non-fiction narrative. There is no higher intellectual purpose to be served by popular narration other than to describe and entertain. It is popular history, not academic history, that is really disengaged from the real world.

The second pressure comes from public policy. The current concern with the "impact" made by academic, university-based disciplines means that history (alongside a cluster of other small arts subjects) has to demonstrate in a more formal way the value it adds to the social product.

It is clear that this does not mean intellectual or scholarly impact, for which the government and perhaps a large majority of the electorate are not directly concerned. What public policy requires is the ability to explain to a taxpaying electorate why it is worthwhile paying large sums of money to allow people to study the past. Impact may be one way of showing that.

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Heritage has an impact, from heritage trails to local museum exhibitions or the preservation of historic monuments. History may also be used to supply government departments with advice on areas where any relevance can be demonstrated, although in many cases it is unlikely to be advice they would either use or understand.

The most that history may do is to offer what are called "transferable skills". The implication of this idea is that history for history's sake has very little to offer. Its worth is to be measured by indices of employability: degree levels achieved; the use of IT and PowerPoint presentations to class; and the production of neatly footnoted essays.

These generic outcomes replace substance with form. It is not history that matters, but the capacity to produce a generation of wealth-creators.

Running through the concern with demonstrating an effective public function is a utilitarian view of scholarship: is it socially useful, does it contribute to raising national wealth, does it create jobs? Ministers, like the young girl who wants to do heritage studies, may well ask of history: "But what for?"

Academic history must resist trying to appease either or both of these constituencies. If these pressures are not resisted, then a thing called history will slowly mutate over the next generation into cultural and heritage studies, informing popular concerns with the past but not sustaining the intellectual and scholarly capacity to develop, elaborate and articulate complex ways of understanding and interpreting it.

Historians have always generated impact of diverse and rewarding kinds, and will continue to do so without the banal imperative to demonstrate added value. There is no real division between what historians can contribute and what the public may expect, but the second of these should by no means drive the first.

Nor should short-term public policy dictate what is researched, how history is taught or the priorities of its practitioners. If fashion, fad or political priority had dictated what history produced over the past century, British intellectual and cultural life would have been deeply impoverished. Not least, the many ways in which historical approaches have invigorated and informed other disciplines would have been lost.

This is a particular issue for public policy, with the idea that history must find ways of engaging more with those who produce policy to justify itself. History is not a congenial tool for doing this. It is in essence a critical discipline, characteristically ambiguous on many key issues, subversive of popular myth and prejudice, and unlikely to supply any advice that is not hostage to paradox and uncertainty. It is hard to imagine the government asking a panel of historians to explain the pros and cons of military engagement in Afghanistan, useful though that might have been. It is the historian's job to ask awkward questions, not to validate current assumptions.

History needs an environment of free enquiry more than almost any other discipline. Like the natural sciences, it is also engaged in pushing back the frontiers of the knowable. It needs to sustain an independent approach to what is researched and written, and, like all academic activity, requires the freedom to make mistakes, engage in long-term research and pioneer developments that the wider public cannot engage with comfortably.

Canadian historian Margaret MacMillan, in her 2008 book, The Uses And Abuses Of History, called on her peers to reduce their commitment to theory and to write shorter sentences. To do so would be to dumb down what history as a human science is doing.

The writing of history is intentionally complex and linguistically sophisticated. At the cutting edge of modern research, it has no less reason to be inaccessible than physics or biochemistry. The reference points for the historian must remain the intellectual framework within which research is generated and the body of academic opinion at which it is directed. The result will not be an invisible discipline but one that is constantly refreshing intellectual life in imaginative, intuitive but rigorous ways.

For academic history, these are not problems that are to be simply wished away or accepted without contest. It is important to be able to think of more positive ways in which history can make its case for survival and meet some of the demand for engagement with the wider world of policy and popular history.

One major difference between the British experience and that of other European states has been the absence in the UK of specialised, sometimes privately funded, institutes where historical scholarship is patronised and protected. It is not easy to imagine local councils funding historical institutes alongside local museums and heritage sites, but it would be one way of ensuring that academic history meets local public constituencies.

It may be possible to find external funding from businesses or institutions for historical centres or institutes, with research fellowships and bursaries that could generate high-quality research and provide close links with the locality. Better still, universities may accept that historical "innovation centres" are a possibility and supply the funding and support to ensure that experimental research can be undertaken without the close supervision of the current review apparatus.

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By making the work of academic historians more visible in a wider cultural and intellectual milieu, some of the alleged dichotomy between the ivory tower and the marketplace may be overcome.

Historians have to accept collectively that the pressure of public fashion and political utility may well undermine the foundation of the discipline unless they are willing to stand up and defend the nature of what they do. Finding their own ways to construct a more effective interface between their discipline and the public would help.

This is not a plea for historians to turn their backs on the wider world: there is nothing to be gained by doing so. Historians should be public figures, too, capable of communicating what they do to a variety of constituencies. Historians, as French medievalist Marc Bloch once remarked, live in the present. Accepting that reality does not mean that they have to accept that present, any more than Bloch accepted the German occupation of his country in the Second World War.

Popular history has a life of its own and generates its own impact; professional historians may play a part in that if they choose, but popular history is not the same as academic history. The former does not generally set out to ask and answer large questions or explore aspects of methodological innovation, but to paint a vivid picture of the past. The demarcation between the two is not sharp, but it needs to be clear.

Public policy may find a role for history, but that, too, is not what it as a discipline is for. Nor in the end does historical writing sit easily with public priorities. History reflects very critically on public policy and political behaviour; it is as likely to endorse subversion as authority; it is concerned with past abuses and discrimination, and by understanding how they operated it opens up current discrimination to critical review; it is concerned with understanding the past by challenging the patterns of myth-making that distinguish popular perception from the view historians may take.

The net result of these many approaches is to make history the most humane of subjects. Its value in broader cultural and intellectual terms is indisputable, although not as tangible as the impact agenda would like. Historical writing at its best is critical, exciting, thought-provoking, frustratingly ambiguous and uncertain. It is the reflective element of the collective mind. If history becomes just heritage studies, the collective intelligence will be all the poorer.

Richard Overy is professor of history at the University of Exeter. He has written more than 20 books on the Second World War and the European dictatorships, including most recently The Morbid Age: Britain Between the Wars (2009) and 1939: Countdown to War (2009). He was a winner of the Wolfson History Prize in 2004.

USE, ABUSE, COMFORT OR CRITIQUE: Whose heritage is it, anyway?

"Academia is bound up with heritage at several levels," says Michael Crang, reader in geography at Durham University.

"A number of institutions are responsible for museums, collections and old buildings. Our University College, used as a student residence, is Durham's medieval castle. Some universities are also used as settings in period or other films."

More obviously, perhaps, many universities offer courses designed for those hoping to work in "the heritage industry". The University of Brighton recently launched a BA in museum and heritage studies. The University of Worcester's BAs in archaeology and heritage studies can be combined with options including art and design, business management, computing and creative digital media. At the University of Northampton, heritage management can be studied alone or with options such as dance, drama, education studies and French.

Other courses develop the more specific skills required behind the scenes on heritage projects. In a difficult economic climate, some have proved vulnerable.

Durham's MA in the conservation of historic objects closed in 2004 but returned last year as an MA in the conservation of archaeological and museum objects. The problem, says Chris Caple, senior lecturer in archaeology, is that funding models often make small courses uneconomic, particularly when they require expensive materials and laboratory work but are not funded at the same level as mainstream science degrees.

The closure of the University of Southampton's renowned Textile Conservation Centre last October was greeted with headlines such as "Textile conservation centre stitched up". In March, however, it was announced that its "key physical and intellectual assets built up over more than 30 years" would form part of the new Textile Conservation Centre Foundation at the University of Glasgow.

Peter Stone suspects he is the only professor of heritage studies in the country. The postgraduate International Centre for Cultural and Heritage Studies at Newcastle University, where he served as director, is a major player in the field, employing 10 academics from different disciplines to offer five MA courses.

Stone has a longstanding background in the sector. He worked for English Heritage for 10 years and was the only British archaeologist the Ministry of Defence consulted in the lead-up to the invasion of Iraq: the military had no provision for cultural-heritage protection and, in typically British fashion, an MoD representative living in the same village as Stone asked him for help.

His centre produces research that is "frequently policy-led and policy-influencing". Yet Stone notes that even highly practical and vocational courses have to address issues of "the use and abuse of heritage". They can draw on a rich body of critical thinking in the area.

During "the heritage wars" of the 1980s, books such as Robert Hewison's The Heritage Industry: Britain in a Climate of Decline (1987) savaged an obsession with the past that had led to an unhealthy vogue for Brideshead Revisited, National Trust tea towels and the idea that nostalgia-themed tourism could replace the jobs lost in heavy industry.

Hewison now combines journalism with a post as professor of leadership and cultural policy studies at City University London, where he teaches postgraduate courses to future curators, museum professionals and performing artists.

The Heritage Industry's targets, he recalls, included "heritage centres, things sold by being called 'heritage' rather than 'new', the pressure to turn monuments and museums into tourist attractions, and dressing up to celebrate the defunct industrial past, as at Beamish, the open-air museum in County Durham".

"Museums should help people engage critically with the past," Hewison says, "rather than revisit it as a source of comfort." The kind of heritage represented by country houses, with their hunting portraits and imperial trophies, is sentimental, snobbish, divisive - and always raises the question of whose heritage they represent, he adds.

This question has also led to fierce disputes, for example, about the holdings of Aboriginal remains within British institutions such as London's Natural History Museum. When it agreed to repatriate some bones to Australia, there were further arguments about whether it was legitimate to take DNA samples first.

People working in museums, heritage agencies or non-governmental organisations find that virtually everything they do is subject to challenge. Such concerns are reflected in courses such as University College London's MA in cultural heritage studies.

Although it is partly aimed at those seeking employment "within the broad sector", the syllabus offers to "analyse 'heritage' as a construct", as well as to "provide coverage of the practical aspects of cultural heritage".

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Topics covered include nostalgia, the invention of tradition, nationalism, the decline of empire, the quest for the "authentic" and the commodification of the past.

matthew.reisz @tsleducation.com.