It seemed only fitting, back in November 1999, that the Queen and Prince Philip should open the Scotsman's new offices: the venerable newspaper, founded in 1817, had evolved from radical opponent to the Establishment to one of its cherished pillars. Its new owners, David and Frederick Barclay, had recently invested millions in new writers, magazines, sections and redesigns. The paper looked good, and its staff seemed re-energised.

Linklater found himself in pole position: the Barclays had stopped right beside him to listen to the Queen's speech; he was determined to finally meet the men who three years earlier had purchased the paper and its associated titles, Scotland on Sunday and the Edinburgh Evening News. "The moment the Queen finished, I turned to my right, thinking that here was my chance, but - puff! - they had disappeared."

Eight years on, the Barclays' vanishing act may become a reality: the word is that they are actively thinking about selling the country's proudest title.

When did the magic fade? Alan Ruddock, Scotsman editor between 1998 and 2000, recalls good profits for the three Scottish titles - the published figure for 1999 was £6m; Ruddock says the actual operating profit was near £10m. There were strong property pages and an appointments section, on Fridays, that sent sales close to 100,000. The Barclays almost doubled the editorial budget between 1995 and 1999; Ruddock remembers it at £9.5m, up from £5m pre-Barclays. "They seemed to value the paper tremendously, and harboured great hopes for it," he says.

And yet, at a time when Edinburgh is thriving as never before - becoming an important financial centre and enjoying a huge property boom - its most important paper is losing circulation (full-price sales were just 59,000 last month) operating with a skeleton staff after several cost-cutting purges. Last Tuesday an attentive reader might have noticed that one byline, John Innes, popped up at the top of 14 articles. It was obvious that these were press agency stories recycled under an imaginary byline to fill a newspaper starved of journalists. "It is important that the Scotsman should preserve a very high standard of journalism and Scottish coverage," Linklater tells me, "and I worry that it seems to be very thinly stretched at the moment."

Some blame must be attached to Andrew Neil, the Scotsman's publisher, who at least in his early years trod an erratic path. In 2000 he spent £6-7m chasing circulation. Price cuts sent sales to 120,000 - which promptly fell back again when the cover price returned to normal. The group lost £1.3m in 2000; it made £6m a year before. There have been seven Scotsman editors in 10 years.

Never content to be a big cheese just in Scotland, Neil was bent on promoting the Scotsman as a national newspaper. He tried to boost sales in London by increasing UK coverage at the expense of Scottish news - a mistake, according to Linklater.

Neil decided to take on the Scottish establishment - the "blethering classes" of doctors, solicitors, civil servants, teachers - who represented the paper's core readership. While the paper continued to support devolution in principle, a more sceptical tone was adopted. And while while old guards often block progress, staff culls meant the paper lost its collective memory. Finally, the elegant broadsheet underwent an unhappy transition to a jumbled tabloid that did not result in the sales boosts enjoyed by other reformatted titles.

A confused identity and a shrinking slice of the market are not the hallmarks of a thriving newspaper. (Some may argue that they are becoming, however, the trademark of the Barclays' titles - the now-defunct European, the vulnerable Telegraph titles, the precarious Business.) Barclay-watchers suspect that after a long hard look at the books, Aidan Barclay - David's son and the hands-on member of the family troika - thought there was nothing left in his armoury. He may feel that he has tried everything: first investment, then price cuts, and now cost cuts; still sales ebb away. Others argue that their move to shed the titles means Aidan wants to concentrate on the Telegraph group: the Daily and Sunday Telegraphs certainly would benefit from an injection of cash.

Some media analysts see the Barclays as merely following in the footsteps of the Northcliffe group, which has just put its regional newspapers up for sale. "This kind of selling has a domino effect - one regional paper owner gets rid of his papers, then they all want to," says As Lorna Tilbian of Numiscorp. She thinks the Scotsman would fetch a good price despite its tribulations: "Regional papers may be in gentle decline but these are dinosaurs with long tails. They continue to offer a local monopoly, high cash generation, and despite the gloomy talk about the internet, they are still a highly profitable business." (As late as 2002, the Scotsman group's profits hit £4.9m.) Tilbian agrees that the Barclays, who bought the paper for £87m, would receive more than double that by selling their Scottish media empire. What price a national institution? If the Barclays sell up, we'll soon know.