Here's a parlour game for you. What's the least popular cause you can imagine? Higher pay for traffic wardens? Estate agents' rights? Or how about this: more taxpayers' money for criminals and lawyers? Few causes could be less likely to rally the masses, unlikely to cough up for the most hated group in the country (and criminals are pretty unpopular too).

So the government is doubtless feeling confident as it marks the end tomorrow of consultation on its planned reforms of the legal-aid system for England and Wales. It enjoys a powerful advantage, taking on what is surely the most friendless wing of the welfare state. Unlike schools or hospitals, legal aid seems technical and remote to all but those who've had to use it. Its clients are not children or the sick, who arouse our sympathy, but - in one half of the system at least - those accused of crimes. Its advocates are not cherished nurses or admired doctors, but a breed we love to hate in all but their TV drama incarnations: lawyers.

And yet a wing of the welfare state it is. Established as part of the post-1945 settlement, free access to justice was seen as no less fundamental a right than education or healthcare. Without a pot of public money everyone can call on if we ever need to defend ourselves, the old gag would become true once more: the law would be open to everyone - just like the Ritz Hotel.

Now, though, that principle is under severe threat, thanks to a cost-cutting plan proposed by Lord Carter, a non-lawyer and former head of Sport England who's become the go-to guy for a government keen to trim budgets. At stake is not only a vital, if unloved, public service and a key principle of equality, but the very balance of the state against the individual on which every democracy depends.

The Carter review, published in July, sounds reasonable enough, noting that we spend more on legal aid per capita than anywhere else in the world, shelling out more than ?2bn a year. That's too much, says Carter, who wants to slice off ?100m, reducing spending on criminal legal aid by 20% over the next four years.

Fair enough, you think, even as you wade through a report stuffed with the now-familiar language of "best-value competition" and "efficient supplier base" - the language of the market. At Carter's heart is a proposal to stop paying lawyers by the hour, and pay them a fixed price for each job they do instead. Again, few lay people would object to that: who cares if lawyers can't rake in those whacking hourly fees, enough to keep them in BMWs and homes in Hampstead, to adapt Jack Straw's formulation. But that's not how it is for those who do legal-aid work. Private lawyers might charge ?200 an hour, but the typical legal-aid rate hovers around ?50.

A fixed rate of ?260 for a police station visit would be fine if the client is a "shoplifter pleading guilty," says Ray Shaw, a London solicitor. "But what if it's 10 hours, or if it takes six trips back and forth?" This is more than just special pleading: one study found that, under Carter's fixed rates, as many as 800 legal practices would become economically unviable and go to the wall. Most of the legal-aid operators are not big firms but small high-street practices, many of them motivated to work in this less lucrative branch of the law by a sense of social conscience. Alison Hannah, director of the Legal Action Group, says these practices could see their income fall by 40% and simply go bust.

Carter envisages as much, sunnily imagining small firms merging and making "efficiencies" on their IT costs, back-office work and the like. Then, in the next round, those surviving firms would have to compete in a process of "price-competitive tendering", jostling to come in below the fixed rate. By the end, only the leanest and meanest would survive.

Let's assume no one cares about a few lawyers thrown on the scrapheap. Assume again that no one's bothered that a disproportionate number of those who go under will be black and ethnic-minority lawyers, so closing off one of their few entry points into the profession. Assume all that and Carter's plan is still bad news. For who would these remaining practices be? Brace yourself for easyJet-style legal services, keeping their costs down by running a glorified call centre, with a floor of staff untrained in the law, patrolled by a roaming solicitor checking quality. On the "paying peanuts, getting monkeys" principle, the poor will in future be represented by paralegals and novice lawyers - as they face prosecution teams armed with ever-greater resources. Worse, these lawyers will have no financial incentive to hunt down that extra witness or do that last hour of research: paid per job, they will have every incentive to spend as little time on it as possible, even, perhaps, encouraging a guilty plea to cut the hassle down to zero.

Gone will be the personal relationship of the high-street lawyer with his clients and their families. Plenty of lawyers testify that they work as unofficial social workers: one told me how he puts in a call to the psychiatric nurse when a certain client walks in clutching multiple plastic bags. That week he had also faxed a prison warden, asking for another client's nephew to be allowed out for a family funeral. In this way, many lawyers function as an unseen, unpaid social service - and that could all be swept away. If it is, and if legal aid is less available to solve the myriad civil disputes that arise every day, then the immediate bill might go down - but there will be a larger one to pay in social costs down the line.

Perhaps most troubling of all is the thought that the government won't mind any of this. It's keen to increase conviction rates, to get courts racing through their cases more briskly, and, in that context, defence lawyers are a nuisance who stand in the way. So prosecutors are strengthened - witness the big budgets of the new Serious Organised Crime Agency - while the defence is embattled. Now plenty of defence lawyers are crossing sides, leaving to enjoy the better pensions and longer holidays available to staff of the Crown Prosecution Service. The result could be a future in which defence work in the big cities is undertaken by a handful of mega-firms, dependent on the government for contracts and therefore with little of the independence we expect of the legal profession in a democracy. And suddenly the state will be even more powerful than it is now, bearing down on individuals with ever-thinner protection.

"Carter is trying to impose a model that simply doesn't fit," says Hannah. The review's failure is to have ignored the real reasons legal-aid bills have gone up: because new technology, from DNA testing to CCTV, and a barrage of new laws mean that fighting a case involves more, and more complex, work. Nor has Carter focused on the simpler ways to bring costs down: forcing private prisoner-transfer firms to do their jobs more efficiently, for example, so that legal aid doesn't have to fork out for people to stand around in court for hours waiting for someone to try. Or we could ensure there are no more farces such as the collapsed Jubilee line fraud trial, which took millions out of the legal-aid budget.

None of this might matter to you now, just like it doesn't immediately matter to me. The law never matters to anyone till they find themselves accused of a crime they did not commit. That's why legal aid matters and we should defend it, not lacerate it in the name of the market.