In 2003 the Danish government reformed universities to "set them free" from the state. Yet ministers are actively trying to shape universities and even set research agendas. How does the government's notion of "freedom" reconcile independence with control? We identify three discourses of freedom: freedom to use academic judgement over what to research, teach, publish and say publicly; a free trade discourse where universities are free to pursue profit; and a modernising state discourse where government steers universities to contribute to the knowledge economy. Danish universities were reformed as part of the modernisation of the welfare state. We explore the assemblage of administrative and funding mechanisms through which the government now steers independent organisations: a chain of contracts for outsourced services, newly appointed managers, output payments and accrual accounting. While responsibility for achieving government policy is passed downwards through the independent organisation, formal lines of accountability run back up to the government. University leaders and academics are set free to manoeuvre within the system, but their economic survival is firmly dependent on responsiveness to centralised steering mechanisms. (Contains 1 figure and 9 notes.)