When opinion-makers and provocateurs raise the spectre of the reintroduction of National Service for the nation’s disaffected youth, they usually have uneducated teens in mind.

But now one of the UK’s most respected think-tanks is proposing a new form of National Service -- compulsory community service for university students. The proposals to make students complete 100 hours of compulsory community service under a UK-wide scheme have been met with raised eyebrows and scepticism among student leaders in Scotland.

However, the recommendations by Demos have received backing from senior Labour figures including David Blunkett and the Government’s higher education minister David Lammy.

The think-tank believes the plan would ease the burden on public services and boost the employability of graduates. Its report advises that the scheme, which would cost at least £450 million a year to run, should be funded by

introducing a 2.5% real rate of interest on student loans. Student loans, the report states, are “heavily subsidised by the taxpayer”, while graduates earn on average £600,000 more over their life-spans than non-graduates.

Sonia Sodha, co-author of the report, said: “The interest raise would be a fair levy on those benefiting from state-subsidised university education. Those who have gained most, graduates and the employed, must also give something back.”

Mr Sodha told the Sunday Herald: “A hundred hours over the length of a degree course works out at around an hour a week. Undergraduates tend to have benefited well from the system so I don’t believe it is asking too much.”

David Lammy backed the idea, saying he hoped it would be included in Labour’s general election manifesto, although he said he would not support making graduates pay for it. “For a more altruistic, less parochial youth culture we need a national civic service,” he said. “How you fund it is another issue. Students wouldn’t be my choice and that isn’t Government policy.”

Liam Burn, president of the National Union of Students in Scotland, yesterday gave a lukewarm welcome to the proposals. “The idea that students should be involved in communities is absolutely positive,” he said. “But the compulsory aspect of it is a little short-sighted -- it doesn’t take into account the varying demographics of the student population and the responsibilities, not least financial, they have to juggle.”

He added: “We’d be wholly against the idea of increasing the interest on student loans because of the enormous levels of debt students rack up already. Graduates also pay higher tax because they tend to earn more money.”