IWAS A witness to history last week as the 650 pupils of Kelso High School voted by a majority of nearly four to one in a referendum to remain an independent state.

The events will be broadcast next Sunday on BBC Radio Scotland's Passport To Kelso. Prominent figures from the UN and the European parliament had been to Kelso to advise the students on arcane issues such as how to rejoin the European Union and whether or not to have a separate currency. Far from turning the students against separatism, it made them keener to embrace it.

Now, I'm not suggesting for one moment that this tells us anything about the results of the May election, still less the outcome of any independence referendum. Schools have always held mock elections. But what was impossible to ignore was the enthusiasm for autonomy and the absence of fear among the pupils here.

These increasingly confident and outward-looking young people seem to have no concept of "the dark side of nationalism". People of my generation watched the former Yugoslavia fracture into a multiplicity of poisonous ethnic nationalisms and wondered if Balkanisation could happen here. Socialists said that nationalism divided the working class. And didn't nationalism help cause a century of war?

Such ideas are ancient history in classless Kelso. Independence doesn't make them think of separation, of dividing people against themselves, but rather of joining a wider community of nations.

And as Kelso declared UDI, over at the other end of the age and income spectrum Sir George Mathewson, the former boss of the Royal Bank of Scotland, was announcing his intention to vote SNP. He too said he "does not share the fear of independence", seeing it as "the best chance for escaping the dependency culture that pervades Scotland at every level". Labour were left spitting blood.

Now, there are still plenty of unionists in Scottish business, and Mathewson has always been outspoken. Nevertheless, it was a dramatic intervention, and confirmed the sense in Kelso that something is stirring in the undergrowth.

Tony Blair's attack on Mathewson's "pure self-indulgence" during the PM's visit to Glasgow on Friday was extraordinarily inept. Mathewson is a national icon, and probably the most respected figure in Scottish business today, having turned RBS into the fifth largest bank in the world. It was a bit like calling Sir Bob Geldof self-indulgent over G8 - there may be some truth in it, but there's nothing to be gained politically from saying so.

Labour are perfectly entitled to say that nationalist economics don't stack up; that independence would leave a fiscal deficit, economic instability, expensive restructuring of the state to reproduce UK institutions. But all that is missing the point. People aren't afraid any more.

SCOTS are feeling a bit better about themselves. Partly this is a consequence of Labour's economic success and 10 years of steady growth. Scots have lost some of their fear of change, if only because they have had to change themselves.

Thirty years ago 80% of Scots lived in council housing, a similar number were unionised and most worked in heavy industry. That Scotland was swept away in the 1980s. In its place came a middle-class society, a service economy, private housing. Class identity has been replaced by cultural identity, collectivism by self-reliance.

Even Blair felt obliged to recognise that independence now is a viable option. Not an option he would advise, not an option which would be risk-free, but an option nevertheless.

Labour would probably have been better advised to stick to this line all along. Wrap themselves in the Saltire, much as Jack McConnell sought to do last year; celebrate diversity; proclaim their own vision of national renewal. Challenge the SNP to say what difference exactly independence would make. But the first minister seems to have sunk without trace, leaving his UK leader dangerously exposed to a political culture that he doesn't fully understand.

So does this mean the SNP are on their way to office, as Alex Salmond will claim today? The SNP leader is looking so confident it hurts. He has a right to feel good about what he has achieved. The recent run of opinion polls has forced sceptics, in and out of the party, to wonder if the SNP really are going to do it this time.

But there is still a long way to go and cause for caution. The launch of the local income tax policy last week did not go well, with Labour claiming that it would hurt middle-income working families and exempt rich old people living in big houses. In an age of rocketing house and share prices, it seems odd to be abandoning taxes on assets and shifting the burden on to income. New taxes are always unpopular, but new taxes on income are political suicide, even if they seem fairer on paper.

Civic Nationalists cannot but be concerned too about the influence of the ultra-conservative Stagecoach owner Brian Souter, who has gifted the SNP £500,000. The architect of Keep The Clause (the statute outlawing the "promotion" of homosexuality in schools) is a divisive figure, one of the few politicians ever to raise a libel suit (later dropped) against a cartoonist - the Guardian's Steve Bell, who had portrayed him as a homophobic bus driver. Long spoons may be advised.

But Souter is unlikely to lose the SNP many votes. If the party can continue to tap into the growing sense of Scottish self-worth, anything is possible. Today Kelso, tomorrow the world.