Newspapers face a grim future in most parts of the western world, but nowhere does it look grimmer than in Scotland. There their decline has been steep and sudden, and with potentially much more troubling consequences for a country that, whether it leaves the United Kingdom or not, has a government and institutions that grow in their power and autonomy and need the scrutiny of an intelligent press. As the journalist Iain Macwhirter writes in an alarm-bell-ringing essay published this week by the Saltire Society, "Scotland has a national political system, but is in danger of losing a national media."

Nothing in Scotland's history suggests that it would abandon its newspapers so readily, or at a time when reading a good one might be more necessary. Scotland used to boast that, per capita, it had the world's highest newspaper consumption – higher certainly than England's – while the Sunday Post featured in the Guinness Book of Records as the newspaper with the largest "readership saturation" of any national, meaning that it was read by three fifths of Scotland's five million people. The Glasgow Herald (now the Herald) can claim to be the oldest continuously published newspaper in the world; it was founded in 1783, two years before the Times's forerunner, the Daily Universal Register, appeared in London.

When I worked as a journalist in Glasgow in the 1960s, the variety of newspapers felt immense. They fell roughly into three categories. There were the London titles that were shipped north by overnight train; there were the London titles that published distinctively Scottish editions in Edinburgh and Glasgow; and then there was the indigenous Scottish press that published mornings and evenings in the four big cities. No genuinely all-Scotland quality paper ever emerged from this patchwork, but the Herald out of Glasgow and the Scotsman from Edinburgh became, together with the Irish Times and for a while the Yorkshire Post, the finest newspapers published in these islands outside London.

As recently as 10 years ago, little of this looked in obvious financial danger. The Mail and the Express no longer published their Scottish editions in Scotland, but the future of the indigenous titles looked secure. Newsquest, the UK division of the US publishing house Gannet, paid £216m for the Herald, the Sunday Herald and the Glasgow Evening Times in 2004. Johnston Press, which had made its fortune in local papers, bought the Scotsman from the Barclay twins for £160m in 2006, which was almost double what the Barclays had paid 11 years earlier. These newspaper groups weren't alone in their blind confidence in newsprint's future: the Guardian, after all, splurged £80m on new printing presses in 2005. But the Scottish papers already sold in relatively low numbers, and the combination of the internet and the financial crisis, with its particular effect on jobs, car and property advertising, has shrunk several of them to the point of questionable viability. According to Macwhirter's essay, the Scotsman has shed 80% of its readers since the Johnston Press bought it, and the Johnston share price has collapsed from 450p to 24p. Given that the free Metro paper lost a quarter of its Scottish circulation last year alone, it could be said of newspapers in Scotland that you can't even give them away.

Outside the loss of jobs, does it matter? Several of the London papers still have Scottish editions – anyone with an interest in the world beyond Britain would need to read one in any case, because no purely Scottish newspaper can afford more than minimal foreign coverage. But Macwhirter argues that their basically southern orientation means that Scotland "is increasingly observing itself in a distorting mirror, in which civil society is bent out of shape by the preoccupations of a media that is not its own". Issues such as Michael Gove's education reforms, immigration and the rise of Ukip, which have little direct relevance to Scotland, "assume disproportionate prominence in public debate". Why is it that no paper other than (possibly) the Sunday Herald will support Scottish independence when a third of the electorate says they want it? Macwhirter suggests part of the answer lies in the geographical location of the paper's ownership and editorial control in a situation where the Scottish press is "almost entirely foreign-owned".

"Foreign" means anywhere outside Scotland, so Trinity Mirror and the Daily Mail and General Trust are included in the definition as well as Gannet and Rupert Murdoch's News Corp, which have their roots in the US. Still, "almost entirely" seems a stretch. The Johnston Press is Scottish, as is DC Thomson; they own three mornings, three evenings and two Sundays between them – every newspaper published in Edinburgh, Dundee and Aberdeen. None of them is in the Yes camp either. In the end, Macwhirter can only imagine that under the domination of London papers the Scottish media have developed "a kind of unionist groupthink; a propensity to accord authority to unionist voices, which has … significantly coloured the character of the referendum campaign, [cramping] public understanding of the choices facing Scotland in its most important year in three centuries".

Then again, it may be something simpler: newspapers with tumbling circulations are inclined to try to hang on to their old audiences rather than to pursue new ones, which is increasingly the mission of news websites, where experiment and failure come at a far lower cost. Scotland has several good ones, mainly nationalist by inclination and sometimes crowdsourced, but the chances that any will ever earn enough revenue to sustain even one full-time reporter over the long term are remote. Could broadcasting fulfill the role of national scrutineer? In Macwhirter's words, "the decline of the press has left the BBC almost single-handedly with the task of reconstituting the national conversation", but BBC Scotland is in a difficult fix, with an uncertain future in the event of a Yes vote and a difficult present as a lacklustre news broadcaster: a "national humiliation" was how the historian Tom Devine once described its radio output.

In the end, Macwhirter decides the state will have to support Scotland's indigenous press if the country is to be intelligently reported and a distinctively Scottish journalism preserved. How could it happen? Possibly like this: a newspaper's circulation – say the Scotsman's – collapses so dramatically that its owner has no choice but to shut it. National consternation follows: that lovely masthead with the thistles is as important to Scotland's sense of itself as the Forth bridge. An independent trust takes over the title funded by a combination of private philanthropy and government money. The trust's constitution guarantees that the government can't influence the editorial content. Uproar follows from the paper's rivals. Eventually, a government fund is set up that doles out small grants to newspapers or websites it deems essential to cultural diversity. After all, doesn't the Scottish government already part-fund the Gaelic channel, BBC Alba? And doesn't Norway spend £30m a year on promoting and protecting cultural diversity in its newspapers? And isn't Norway in so many ways exemplary – a model for Scotland?

Before I read Macwhirter's essay I wouldn't have believed any of this a possibility. I am less sure now – less sure also that it would be worse than the alternative, which is closure followed by closure and the slow death of proper journalistic inquiry into many aspects of Scottish life, not just governmental, no matter which side wins the referendum or whoever comes to power.