Baxter’s preference for integrating the problems of research and industry (and especially in the case of atomic energy, government) is the reason, according to Philip Gissing, for a conflict in 1954 between Baxter and Sydney University’s renowned entrepreneurial Professor of Physics, Harry Messel. Messel was keen to install a small nuclear reactor for research purposes on campus. Baxter was then heavily involved in lobbying for public funding, eventually successfully, for a large nuclear reactor at Lucas Heights in southern Sydney. At an Atomic energy symposium hosted by Baxter at the technology university in 1954, Baxter attacked Messel’s proposals:
I think we should build a reactor very soon but not a low-powered toy reactor for use in the Universities. We want a real reactor from which we can study and learn.
Baxter undoubtedly wanted a comprehensive scheme that involved researchers, industry and government in an authentic setting. In fact, since a hope that there would be fewer constraints on nuclear research and atomic strategy was probably what brought him to Australia, it should not be surprising that Baxter’s desire for nuclear research facilities were as expansive as possible. Sydney University argued that they could not see why there could not be both large and small reactors and that a university-based reactor would give opportunity to train students without them being exposed to national secrets. Baxter simply described the small reactors as a waste of money, a “fetish” amongst the European universities wishing to show off to guests.
The newspaper coverage of Baxter and Messel in 1954 makes their conflict a question of which university would preside over atomic research, Sydney or NSW. Undoubtedly both universities would have preferred the distinction, but other complicated machinations were going on. Delays to the eventual building of the Lucas Heights reactor were a result of the Atomic Energy Commission, chaired by Baxter from 1956 into the 1970s, attempting to keep its options open about using the reactor parts they purchased from overseas for nuclear weapons as well as energy. Conditions attached to purchase of parts determined which types of reactor could be considered if Baxter’s plan for Australia to be self-sufficient in defence and nuclear energy were to be possible.
Baxter was never able to successfully sell his scheme of integrating research, energy and defence strategies in nuclear power. Not satisfied, as Messel and Mark Oliphant were, for the Lucas Heights nuclear reactor to enable Australian science to contribute knowledge to the world, Baxter had wanted to connect scientific knowledge with the problems of application for energy and national defence policy. However, technical political opposition to nuclear weapons meant that, by the mid-1960s Baxter could no longer “get his way with skilful organisation of meetings, and backroom machinations.” Pushed, Baxter joined the anti-communist organisation, the Australian Association for Cultural Freedom. He escalated, without success, his argument for Australian self-sufficiency, claiming that nuclear energy and weapons gave Australia the potential to be self-reliant and defend itself from Asian attack.
Atomic energy is hardly a mainstream business in Australia and Baxter’s University of New South Wales certainly also forged links with many other industries. Within the first quarter of its existence, Unisearch was showing receipts from Taubman’s paints, Ampol Petroleum and Besser Vibrapac Masonry. Nuclear science was Baxter’s own field, but his belief in the collaboration of industry, government and universities in the production of knowledge shaped the character of the whole of the University of New South Wales. He clearly considered his particular approach to efficient and useful knowledge to be the right way forward for the whole sector:
The success of the world’s big science-based industries, the chemical and petroleum industries, electronics, aviation, pharmaceuticals, communications and automobiles, shows that these industries have mastered the task of using science in a profitable way and…they provide pointers to how science policy might be applied to government, if governments had the courage.
This belief was about the way Baxter thought scientific problems were best addressed, but it was also political. Baxter was concerned – and he was not alone – that communism did this better. Not only about one-upmanship, Baxter said:
Technological and industrial progress is today the way to world supremacy.
 Gissing, "Sir Philip Baxter, Engineer: The Fabric of a Conservative Style of Thought", 124.
 Anonymous, "Atom Men Explode on Small Reactors," Sydney Morning Herald, 1 September 1954.
 Anonymous, "Atom Research Plant 'One of the Most Modern in the World'," Sydney Morning Herald, 12 October 1954.
 Anonymous, "Atom Men Explode on Small Reactors." Anonymous, "Professors Differ on Atomic Plant," Sydney Morning Herald, 2 September 1954.
 Gissing, "Sir Philip Baxter, Engineer: The Fabric of a Conservative Style of Thought", 125.
 Oliphant was head of physics at the Australian National University and was the only other scientist in Australia to have worked on the first atomic bomb in the USA
 Gissing, "Sir Philip Baxter, Engineer: The Fabric of a Conservative Style of Thought", 126.
 Gissing, "Sir Philip Baxter, Engineer: The Fabric of a Conservative Style of Thought".
 Unisearch, "Statement of Receipts and Balances 1st April to 30th June 1959," 125-26.