Context. The generation of X-rays in accreting T Tauri stars (TTS) is thought to be predominantly due to energy dissipation in magnetic fields, but alternative X-ray generation mechanisms have been proposed, such as heating in accretion shocks near the stellar surface, or in shocks forming in jets. Aims. We test models and trends discussed in the literature using X-ray data from the classical TTS T Tau. Methods. High-resolution spectroscopy from the Reflection Grating Spectrometers on XMM-Newton is used to infer electron densities, element abundances and the thermal structure of the X-ray source. We also discuss the ultraviolet light curve obtained by the Optical Monitor, and complementary ground-based photometry. A high-resolution image from Chandra constrains contributions from the two companions of T Tau N. Results. The X-ray grating spectrum is rich in emission lines, but shows an unusual mixture of features from very hot (≈30 MK) and very cool (1-3 MK) plasma, both emitted by similar amounts of emission measure. The cool plasma confirms the picture of a soft excess in the form of an enhanced O vii/O viii Lyα flux ratio, similar to that previously reported for other accreting TTS. Diagnostics from lines formed by this plasma indicate low electron densities ( < ∼ 10 10 cm −3 ). The Ne/Fe abundance ratio is consistent with a trend in pre-main sequence stars in which this ratio depends on spectral type, but not on accretion. Conclusions. On the basis of line density diagnostics, we conclude that the density of the cool "soft-excess" plasma is orders of magnitude below that predicted for an accretion shock, assuming previously determined accretion rates of (3−6) × 10 −8 M yr −1 . We argue that loading of magnetic field lines with infalling material suppresses the heating process in a part of the corona. We thus suggest that the X-ray production of T Tau is influenced by the accretion process although the X-rays may not form in the bulk of the accretion footpoints.