The unionists are in a bit of a pickle at the moment, to put it mildly. In response to Alex Salmond's "national conversation", the three pro-Union parties have accepted the need for a reassessment of the devolution settlement. Since the status quo is generally viewed as unsustainable - and going back to the pre-Scottish Parliament status quo is not an option - further devolution of powers to the parliament, short of independence, seems the best bet for unionists.

But, in supporting that option - and while talking of strengthening the Union by strengthening devolution, as the Tories do - they know, deep down, that they are playing into the hands of the nationalists. It's the cliche of the slippery slope.

Yet the choice is not simply between further devolution to Holyrood and full independence. There is, as it were, a third way - an option that would not threaten the Union but, at the same time, would answer the legitimate grievance of those who crave greater self-government. Could it be that the saviour of the Union may come from an unlikely source: the principle of localism?

It is no coincidence that the Thatcher years saw a huge upsurge in Scottish nationalism. This was not just because the traditionally Labour-supporting Scots felt dismayed at the Conservative government in far-away London. It was also because the Thatcherite paradox meant that, while the post-war socialist consensus of nationalisation was abandoned in favour of privatisation, the centre of government assumed more and more control, to the devastating cost of local government and local democracy - the poll tax being an example of this. Intrinsically local issues ceased to be decided by the local polity, but were dictated from above by the increasingly bloated Whitehall.

This brings into sharp relief a perennial problem: how to save the Hobbesian state from destroying the very freedoms it exists to uphold? Philosophically speaking, power may derive from the people - a concept known as constituent power, not sovereignty - but it is necessarily delegated upward. How do we hold that delegated power to account? Centralised democracy, where power is delegated to the highest echelons of government, does not provide the answer. The distance between governor and governed is too great for effective accountability. Local democracy, on the other hand, provides more opportunities for the voter actively to participate beyond the ballot box. Individuals can have the greatest effect on lowest-tier local government. In short, decision-making is more trustworthy, more accountable and more tailored to the community if done locally.

In opposition, New Labour accepted this. Tony Blair committed to more local autonomy and even signed the European Charter of Local Self-Government. This, as is all too often the case, was not honoured in government, and Labour has centralised with vigour. Devolution proved impossible to abandon - but devolved government is not necessarily local government. According to the maxim, all politics is local. But how local is local? Instead of devolving power back to the locality of the 1970s, Labour's devolution settlement created a new tier of government, more local than before, but not local enough to be effective.

This is not a diatribe against the creation of the Scottish Parliament. But we must not be complacent in thinking that devolution provides sufficient local governance for Scotland. In the conversation over Scotland's constitutional future, the need to restore powers to local government and create genuine local democracy must be fully explored and discussed. For example, we should focus on giving local councils fiscal autonomy and end ring-fenced central grants and central controls.

To an extent, a reinvigoration of local self-government throughout the United Kingdom could resolve some of the anomalies thrown up by asymmetrical devolution. Rather than the "English votes for English laws" answer to the West Lothian question, devolution to the locality could provide a more uniform approach across the United Kingdom, without threatening the Union. Instead of John Prescott's ill-thought-through - and hence ill-fated - English regions, such localism would give England an element of local democracy on a par with Scotland and Wales. Moreover, the institutions necessary are already in place.

At the heart of the case for localism is this: while UK-wide issues should have a UK-wide solution, local issues should have a local solution. I have every reason to believe the zeitgeist is changing and that the action needed - which is nothing short of a revolution - may be more achievable than is often assumed. There is a consensus forming. David Cameron describes himself as a "convinced localist"; Hazel Blears, the Secretary of State for Local Government, says "we are all localists now". And if it results in a strengthening of the Union, but with greater self-government, who could disagree?