Terence Kealey, vice-chancellor of Buckingham University since 2001, may just be the most reactionary man in Britain. The novelist Evelyn Waugh complained that the Conservative party had never put the clock back by a single second. But Kealey doesn't deal in seconds, or even years, but millennia. Everything started to go wrong after the Stone Age, he says. The advent of agricultural societies deprived most humans of liberty and turned them into slaves and serfs. In the Stone Age, people lived as they now do in Balliol. Then came the Bronze Age and command economies (think of the pyramids), and it was downhill all the way.

Decline accelerated in the 16th century thanks to Francis Bacon, who is widely credited with inventing scientific method, and who argued that research was a precondition for progress and should be supported by kings and princes (ie the state). Bacon, Kealey says, was "a crook, a cheat and a fraudster", and science isn't as he described it at all.

That was bad enough, but three centuries later came free, compulsory education. This was quite unnecessary, in Kealey's view, because the churches were already educating the majority of under-11s, and Victorian England had near-universal literacy before the 1870 Education Act. Fees were modest and waived for the poorest. Free education was a state power grab, designed to undercut the voluntary schools, and it has been a disaster.

Kealey, who is 58, calls himself a passionate libertarian and that's what you'd expect from Buckingham, which was founded in the 1970s as Britain's only "independent" university. Other universities are technically independent, but Buckingham alone refuses to accept money from Hefce (Higher Education Funding Council for England). Its home students pay annual fees of £8,640 (for degree courses that take two years), though they are eligible for state loans and maintenance grants just as their lecturers are eligible for research council grants. No minister can tell Buckingham what to teach or how to spend its money. Kealey thinks all universities should be like this.

The prevailing winds are in his favour. The idea of setting public bodies free from state control is increasingly popular with all political parties. Kealey thinks it is time for more private universities, and is exploring the idea with philanthropists. Meanwhile, established universities face severe funding cuts, restrictions on admissions and even closure.

"There's a crisis, but it's moral, not financial," Kealey says. "Vice-chancellors shouldn't be cutting staff. They should be marching round parliament with placards demanding their economic freedom. Because they take government money, they lose the right to set their own fees and admit as many students as they want. Imagine Sainsbury's if a ministry of food dictated its product lines, its prices and the number of customers it admitted. I am shocked at the universities' response."

"Shocked" is Kealey's favourite word, and the theatrical way he uses it reminds me of Captain Renault in Casablanca who was "shocked, shocked!" to find gambling in Rick's Bar. This impression is reinforced when I learn that he is half French on his mother's side. Indeed, he attributes his "love of freedom" partly to a reaction against his French upbringing (he never knew his English father). "My mother had a very authoritarian way of looking at the world. Her father was a colonial civil servant in Lebanon and his job was to shut any Lebanese company that threatened jobs in France – he single-handedly closed the Lebanese silk industry – but she couldn't see anything wrong with that."

As a child, Kealey lived in "a bubble of Frenchness" in Kensington, west London, and didn't speak English until he started school. He was put down for Colet Court, the prep school for St Paul's, but "I thought it was a horrible ugly place, so I failed the entrance exam deliberately". He eventually went to Charterhouse, where he soon discovered he was a libertarian. "In my first year, I turned a corner and there were some 600 boys in uniform all lined up and being inspected by some general. It was the cadet force, and I thought: I just don't want to be another uniformed soldier in a mass of hundreds. So I joined the Boy Scouts, which was the alternative. I really am an individualist, you see."

He understood this with still greater force while studying at St Bartholomew's medical school in London. "I had a socialist phase, which lasted about six weeks. I told a friend I thought we should all be equal and I might join the Labour party. And he said if I did that I couldn't send my children to private school. I realised then that socialism wasn't about liberty."

He says he never intended to practise medicine and went to Bart's – which, he was "shocked" to find, was intellectually inferior to Charterhouse – to please his mother. He wanted to be either a historian or scientist, and eventually opted for biochemistry, doing postgraduate research at Oxford on skin glands and cystic fibrosis. He adored Oxford, "a perfect community, dedicated to the search for truth, driven not by love of money but by love of ideas". But lab space was limited and he had to leave for Newcastle, which he seems to have regarded as an English equivalent of Siberia. Nearly 30 years on, he still seems oddly upset about the whole thing and admits it formed his unforgiving views of scientists and scientific institutions. "How was it that you could commit yourself to a career in science and forego most conventional perquisites of salary and status and yet be treated like that?" he protests.

He returned to Oxford in 1986 as the university refused Margaret Thatcher an honorary degree, arguing that she had damaged higher education and particularly scientific research. "At the time, I had two loves: Margaret Thatcher and Oxford, and they clashed. Oxford said British science was in decline; she said it was more generously funded than almost anywhere else. I decided to find out who was right. And I discovered British science had grown 70% in a decade. Mrs Thatcher had cut state-funded science but the growth of privately funded science had more than compensated. The scientists were guilty of a completely dishonest presentation." Captain Renault – sorry, Kealey – pauses for dramatic effect. "I was shocked, shocked!" he cries.

He now had a set of provocative, counter-intuitive, broadly rightwing opinions that earned him a place in the Telegraph-Times-Spectator stable of writers. First, he decided, scientists are not dispassionate truthseekers, forming hypotheses and testing them against evidence, as the orthodox account has it. On the contrary, he has written, they "are liars … They choose facts that suit their theories, they ignore inconvenient findings, then they try to bludgeon their colleagues into agreeing with them."

Second, governments shouldn't fund research. State-funded science, he argues, crowds out privately funded science and, because it doesn't respond to market needs, contributes nothing to economic growth. If anything, nations go into decline when the state takes over science. "People believe science is a public good. It's not." Moreover, dependence on the state is bad for universities; German academics, heavily state-funded, raised scarcely a peep against Hitler. "Universities should be centres of critical scholarship, hassling governments."

Unsurprisingly, these views made Kealey unpopular among his fellow academics. "People wouldn't talk to me. I was seen as a traitor. One academic said to my face that academics were free to discuss anything except funding. State dependence had corrupted Oxford. It was very shocking to me." He moved to Cambridge in 1988, which was no more enamoured of his views. "But everybody knew me in Oxford and nobody did in Cambridge." Even at Cambridge, it became clear he would never get promotion, so when Buckingham offered the vice-chancellorship, he jumped at it.

Buckingham was then in the doldrums. Before the mid-1990s, it attracted middle-class students who preferred something called a university to anything called a polytechnic. But when polys were upgraded to universities, Buckingham's numbers crashed and it more or less dropped out of public consciousness.

Kealey put it on the map, recruiting a gallery of academic mavericks and eccentrics. They included Chris Woodhead, the head of Ofsted who earned the abiding hatred of teachers; Bruce Charlton, a psychiatrist who said working-class students have significantly lower IQs than their middle-class peers and so you can't expect top universities to admit them; and Anthony Glees, a security specialist, who proposes that universities ban faith societies and governments consider internment for Islamic extremists. Most recruits have less dramatic views, but a remarkably high proportion get quoted and published in newspapers, and don't mind upsetting conventional opinion.

Kealey has also diversified Buckingham from its core areas of business, law and accountancy into, for example, medicine and education. "He's an inspirational character, who has brought in lots of ideas," says Alan Smithers, who moved from Liverpool to head Buckingham's education and employment research. "He's not so good at implementing them, but he creates a very stimulating working environment."

The only cloud is a bad report from the Quality Assurance Agency – which has the power to recommend Buckingham lose its royal charter – but Kealey says the agency never went into classrooms, and just looked at paperwork and committee minutes. "It's really a process assurance agency." He points out that Buckingham consistently tops student satisfaction surveys. That is probably because its student-staff ratio is the best in the country and, since they're paying full fees, students have to convince themselves the courses are worth it. Kealey says there's something in both explanations though he adds, sweetly, "the main thing is that our students just seem to be incredibly nice".

It's hard to tell how seriously Kealey takes himself. He has an instinct for controversy, writing columns on, for example, why the "war on drugs" is bad, why patents should be abolished and (my personal favourite) how the hypocrisy, violence and torture of the Iraq war can be traced back to the American revolution. He's also good at the sex angle, with published articles about topless female statues in English churches, how sado-masochism evolved and, most notoriously, a piece in Times Higher Education (which he said was satirical) arguing that academics should enjoy a female student who "flashes her admiration" as "a perk". He has written a book called Why Chimps Have Large Testes and Other Bollocks, and his latest, elaborating his views on the state and scientific research, is called Sex, Science and Profits, though there isn't actually much sex in it.

He often contradicts himself – writing in one newspaper that "students are getting better grades because they are working harder" and, in another that "degree inflation has become a scandal" – and he seems as guilty as the scientists he criticises of selecting evidence to support whatever point he's making. For example, in a pamphlet on the 19th-century "nationalisation" of schools, he quotes figures to show that economic decline followed state takeover. In his book, he uses different figures to "prove" Britain continued to prosper despite the Victorian state's failure to fund science. But that's show business.

I suspect he'll do almost anything for publicity, and he's quite touchingly anxious about making a good impression on Guardian readers, asking whether or not he should wear a tie for the photograph. He says he only believes in markets "up to a point" and he really cares about the poor; it's just that he thinks liberty can do more for them than the state. He also says he has more in common with lefties like me than with Tories. "They are instinctive defenders of an elite that is privileged by our society. Whereas you, like me, are an instinctive analyst." On which flattering (to both of us) note, we go to a convivial lunch. Perhaps this, as Rick said to Inspector Renault, could be the beginning of a beautiful friendship.