The Herald, 12 June 2007. The Scottish island of Eigg celebrates 10 years of community ownership. CHE Fellow Alastair McIntosh was involved with the buyout, and graduates Norah Barnes and Bob Wallace are residents on the island, building an eco-centre. By David Ross.

Over the past 30 years, stewardship of this island has come to symbolise much that was wrong about the free market and land. The challenge now for everyone involved in this great undertaking is to create a symbol of hope and achievement, which others will be inspired to follow."

Brian Wilson had just been appointed a Scottish Office minister when he stood on a hillock up from the jetty on Eigg and spoke these words exactly 10 years ago. He returns to the island today to mark the first decade of that great undertaking - the purchase of the island by the community and their partners for £1.5m.

There is no doubt the buyout has utterly transformed the island's fortunes and has indeed been an inspiration to more than 30 other communities, most notably Gigha, which followed five years later.

Eigg's population has increased by 25% to 83, and an island which had offered virtually no paid jobs under private ownership now enjoys almost full employment. More than 20 new businesses have started up, four new crofts have been created and management has been introduced to the island's decaying woods. Broadband communications have arrived, as have improved ferry links via a £7m new pier. And, crucially, a new mains electricity system, which will supply the island's energy needs entirely from renewable sources, including hydro, wind and solar, will be fully functioning by October. The community-based Isle of Eigg Heritage Trust, which owns the island, is now fully self-supporting.

One person enjoying the island's new regime is Stuart Millar. The 49-year-old joiner from Glasgow arrived on the island 19 years ago with very little. Now he has restored Howlin House, where J R R Tolkien once had a holiday and was reputed to have got inspiration for parts of Lord of the Rings from looking across to the mountains of Rum. Stuart has one of the four new crofts where he is rearing all manner of rare-breed hens, sheep and cattle, and in-between fishes for lobster.

Stuart is clear: "None of this would have happened without the buyout. That's the whole point. Nothing on the island would have happened. When I arrived, I lived in a caravan on somebody's croft. It was only because of their goodwill in letting me have my caravan there, that allowed me to stay on the island.

"There is no question that this is where we are going to live our lives. My wife spent years trying to get back here, so we are not going to leave now. We want our girls to grow up here."

Earlier this month, Stuart married his partner, Kathleen, 39, whose mother is of native Eigg stock. They now have two daughters - two-year-old Breagha and four-year-old Catriona.

It is difficult to remember that 10 years ago the Heritage Lottery Fund was refusing to assist the buyout if the local people were to control the island. Apparently, the islanders were not to to be trusted to look after their own future. To get round that, Simon Fraser, the Stornoway solicitor who was the trusted navigator for most of the headline community buyouts from Assynt (in 1993) onwards, came up with the trust's present structure of a company limited by guarantee with a membership of three organisations: the island residents' association, the Scottish Wildlife Trust and the Highland Council, with four, two and two directors respectively and an independent chairman.

In the end it wasn't needed, but it was a nervous time, as Fraser recalls: "Assynt was a nail-biter and I felt a great responsibility, but Eigg was on a different plane emotionally. It was so incredibly important to all these people. It had the potential to turn their lives around. The people were clinging on with no security of tenure, having to put up with leaking roofs and busted old generators. In Assynt, nobody could put the crofters out of their homes. On Eigg, they could. The residents' lives were dictated by the whim of their landlord. There was no real money economy left on the island.

"There is absolutely no doubt in my mind that it struck a major blow for the cause of land reform. It was the thing that turned the corner and got the stone rolling. If the people of Eigg could do, it other communities could as well."

That might explain the deeply entrenched antipathy to Eigg of all the community buyouts, and why the claim that the project epitomises dependency on public profligacy has been so hard to shake. It is a notion that still amuses Fraser. "I remember speaking at a meeting in Inverness and being heckled by Lord Burton of Dochfour, who kept shouting: What about all the public money that went into Eigg?' I enjoyed replying that Eigg cost £1.5m and, apart from a grant of £17,500 from HIE, there was no public money to buy the island - it was all raised by islanders. The money that went into Eigg subsequently was in the form of grants which are available to all businesses in the Highlands and Islands, like his own. That shut him up."

Of course, the whole thing was greatly helped by the donation of £900,000 from an anonymous benefactress. The only one who knows her identity is the estimable Maggie Fyffe, trust director and administration secretary, and she is not telling. All inquiries are met with a smile: "But I can tell you that I've invited her for the celebrations. She has been invited in the past but I couldn't honestly say whether or not she has visited."

Maggie prefers to talk about what has happened since, which she does with obvious pride.

But things could have been so different for Eigg. In March 1996, the German artist Maruma had bought the island from Keith Schellenberg for £1.6m the previous year and was busy selling all its livestock.

His tenure was to be short-lived. The island duly came back on the market that July at £2m, and the Isle of Eigg Heritage Trust launched the appeal the following month. There were also distractions: a body claiming to be The Pavarotti Foundation wanted to buy the island for 3000 musical students which would have increased the island's population by 4615%. The next week it was reduced to 300. Then there was the Luxembourg company Compagine de Participations, who wanted it for a holiday project; and a man whose Surrey-based private bank had gone into administration in 1992 owing £10m to 1000 depositors. He wanted to farm on Eigg.

The words "lucky" and "escape" have come to a few islanders' minds since.

Today, up at the Lodge where Schellenberg, Eigg's penultimate private owner, used to entertain summer guests, Nora, 38 and Bob Wallace, 44, are half way through a five-year plan for establishing a centre for environmental studies which will promote sustainable living. Clyde, the youngest of their three sons, is the youngest resident on the island at just over a year old.

His parents arrived three years ago, but spent the first two years living on a boat as the preparations progressed for the lodge. Nora, originally from Shetland, used to work as a countryside ranger in various parts of Scotland. But now she feels at home.

"There is a great feeling of optimism here," she says. "The community is very enterprising and there are new ideas all the time."