PANAMA is the best. At least that's Walter Martin's first answer when he's asked about his favourite canal. "The locks are the most dramatic," Mr Martin explains, remembering a lifetime in shipping. Then he changes his mind. "No," he says, "the Forth and Clyde is better."

The 76-year-old retired chief engineer is steering a narrowboat down the Scottish canal and doesn't want to be disloyal. "And it's not just better because it's 300 yards from my house," he says.

Mr Martin, from Bishopbriggs, is at the rudder of the Janet Telford, one of three vessels run by the Forth and Clyde Canal Society, a band of 400 or so enthusiasts who almost single-handedly saved the waterway from oblivion. He's steering the boat, which is running at its maximum speed of 4mph, and reminiscing about other canals.

The Forth and Clyde, the first sea-to-sea ship canal in the world - 35 miles from Bowling to Grangemouth - bears comparison with all of them on most counts. But not on traffic. At least not yet.

Almost six years after the Forth and Clyde was reopened for through-shipping there are just 376 boats registered to ply her waters - and those of her sister waterway, the Union Canal, from Falkirk to Edinburgh. That is up from 192 in 2001-02. But it is well short of where the firm that owns Scotland's canals would like to be.

British Waterways Scotland, The Herald can reveal, has commissioned independent market research showing "latent" demand for up to 2000 vessels to be based on its lowland canals - the Forth and Clyde and Union - within the next five to 10 years.

"We have a waiting list of 150," the company's managing director, Steve Dunlop says. "I am not nearly satisfied with either the level of transit down the network or the level of on-water activity. I would say we are just on the starting blocks."

Reopening Scotland's lowland canals didn't come cheap. Some £85m was spent on the Millennium Link, a lottery-funded project to relink the Clyde with the Forth for the first time in a generation by reattaching the Forth and Clyde Canal to the Union Canal for the first time since the 1930s. The link between the two ate up a lot of that investment.

Few would now question why. The Falkirk Wheel, one of modern Scotland's great engineering feats, is practically a giant Ferris wheel for boats. An astonishing 135,000 people travel around it every year, making it one of Scotland's fastest-growing tourism attractions.

But how often is the wheel used as more than an - admittedly fantastic - fairground ride? There are just 2000 transits between the Forth and Clyde Canal and the Union Canal every year.

Canals, of course, are about a lot more than boats. There were 25 million visits to Scotland's four working canals last year (the others are the Crinan across Kintyre and the Caledonian up the Great Glen). New housing and leisure districts are either built or planned along the route of the lowland canals, with major developments such as Speirs Wharf in Glasgow and the Edinburgh Quay driving urban redevelopment. Regeneration, after all, was the big buzz word when Scotland applied for lottery funding for the Millen-nium Link.

But boats, too, are part of what makes canals appealing to all those visitors. As the number of boats rises so, too, does the number of "towpath" visitors. Seven million people had walked, jogged or cycled down the lowland canals in the first year after they reopened. Last year the figure was 15 million.

Jim McLachlan sees a lot of them. The chairman of the Forth and Clyde Canal Society races them along the waterway. Races slowly, that is. "The walkers are at our pace," he says. "The joggers are faster. Canals are really de-stressing. At 4mph, you can't help but relax. You could argue the canal could have done better in terms of boating, but the towpath is booming. You need the boats to attract everything else, though. And these things take time."

So, what is keeping boats off the canal? Parking. There are just not enough places to moor a boat in the lowlands. "The marinas fill up almost as soon as they are opened," Mr Dunlop says. One, at Auchenstarry, near Kilsyth, is heaving with boats. Another is to open at Kirkintilloch in time for this summer's season. More traffic should come soon, too. Boats entering the canal from the River Carron near Falkirk have just half an hour to do so.

"That's not a lot of time for your £100,000 pride and joy to get through," Mr Dunlop concedes. That's why major new investment is being carried out to boost navigation there.

Mr McLachlan says: "It seems to be easy to get politicians to commit to a big capital project. What we are finding hard is to get them to fund the everyday things - the maintenance, the pruning along the banks."

Canals always seem to have struggled financially (although the Forth and Clyde turned out to be a lucrative investment for more than a century). The two Highland waterways, the Crinan and the Caledonian, now have healthy traffic. But that hasn't always been the case. The Union, built to beat the Edinburgh coal monopoly in 1822, at best barely broke even afterwards.

This newspaper reported on plans for the Forth and Clyde in its very first edition, in January 1783. The then Glasgow Advertiser reported a meeting of shareholders for a proposed branch to Bo'ness on the Forth. That plan collapsed amid money problems.

Most of Scotland's canals were built for freight. In England - where narrow canals are much busier than the Forth and Clyde - there are already some environmentally friendly shipments being made again. Tesco, for example, is shipping wine on the Manchester Ship Canal. So, could cargo be back on the Forth and Clyde? Not yet, says Mr Dunlop, although he hinted at half a dozen potential schemes and his company trans-ships 170,000 tonnes of timber through its port of Adrishaig at the east end of the Crinan Canal.

The last truly commercial movements through the Forth and Clyde took place in the sorry week between Christmas 1962 and New Year's Day 1963, when it shut by government order (to save the even then modest £160,000 cost of a new bridge on the A80). Its last vessels were fishing boats, moving from west to east. Puffers, little steam cargo ships immortalised in the Para Handy books, used to ply the waterway, part of a substantial coastal freight network that at least one enthusiast believes should be reborn.

"We need to reinvest in the puffer," says historian Guthrie Hutton. "The Forth and Clyde is certainly wide enough for container traffic. Imagine little container boats up and down the coast of Scotland and through our canals?"

Right now it takes three solid days to get from Bowling to Grangemouth. "I suppose the labour costs would rule out freight right now," Mr McLachlan says.

But, as global warming hits and fuel prices rise, who knows? Everything on canals takes it time. Maybe their rebirth will too.

Back on the Janet Telford - named after the woman who bore Scotland one of its greatest engineering sons, canal, road and bridge-builder Thomas Telford - Mr Martin is steering out of the wind, a relatively rare problem on a canal, even in Scotland. "At least it is not the Suez," he says against the driving rain. "It is not nearly as interesting. Just a bloody desert, the Suez."