Damon Albarn on: Blur, Blair, Princess Diana and all that Spice stuff. By Max Bell

The well-connected man about town needs his club and Damon Albarn is no exception. Arriving for our midday meeting at Soho House, he is shown to the members' drawing-room and plied with pots of tea. With its open fires, saggy-bottomed sofas and antique ginger jars, this Greek Street bolthole has the air of a house, a very nice house, in the country. So let's clock the geezer causing the clientele their mild frisson.

Today he is wearing Stussy and battered trainers. His hair has that just-shagged look. He's bright-eyed and bushy-tailed. Like the perfect interviewee that he is, he settles down immediately. Occasionally he fiddles with his gold-coin ring or worries an earstud; otherwise the Albarn karma seems to be in perfect equilibrium. Almost. 'Well! Where have you been hiding?' asks a club greeter in instant-mothering mode. It's the wrong tack. 'I've been workin', inni? Been abroad for seven months. Just got back from Singapore.' Damon bridles slightly, lest she think he's been in a sanatorium or, worse, resting, between engagements.

In popbiz out of sight is out of mind, but, perversely, Albarn and Blur are in an enviable position. Far from having their noses broken by Oasis in the over-hyped 'battle of the bands' two years ago, the civilised quartet took stock and cut the crap. They made a calculated artistic decision to be themselves and let others fly the flag for the increasingly discredited sideshow known as Britpop. 'Partaking in that whole competitive period was my big problem,' Albarn muses with the air of a newly reflective man about to hit 30. 'It was a personal thing, pride maybe, but it was also a lack of confidence in my own abilities. One way of proving myself was to set up against others. I look back at that period with affection, because I had the bit between my teeth - but I never want to be like that again.'

Any notion that Blur's star was eclipsed by our friends in the North has been dispelled by their self-titled fifth album, which grew in stature as it spawned four top-ten hits: 'Beetlebum','Song 2','On Your Own' and 'M.O.R.'. Now their biggest worldwide seller, it has helped Blur crack America ('Song 2' accompanies NFL and NHL highlights).

Quietly vindicated, Albarn reckons he's opened up a lot more since deciding not to compete. 'I've become more honest and that's a privilege you acquire with confidence. It's an all-of-life kind of change. I just feel comfortable now and coming back to England after a long period away, when I was really down on the place - oh God yeah - I can appreciate it again.'

You don't have to be A.J.P. Taylor to recognise 1997 as a watershed year for Britain, with a series of events that turned the country into a global goldfish bowl. One of our foremost chroniclers of pop culture, Albarn found himself on the outside looking in. 'All these weird occurrences... I was in Greenland when Diana died; in Australia for the Woodward trial. I've been looking at England via CNN. The Diana thing was very strange. I came back on the night before her funeral and I couldn't relate to the solemnity at all. I felt like a voyeur. I went to Kensington High Street on the day of the funeral; the streets were completely deserted, everything was shut. Suddenly this huge silent crowd came in a procession out of Kensington Palace and they all had the look of zombies.'

Then, the Spice Girls debacle came to a head. 'I'm on the same label as them and as soon as I heard they were making the movie I thought, "Uh-oh, that'll be a disaster". I was amazed when they met Nelson Mandela; they had nobody holding the reins, they were out of control. I can hear Geri saying to him, "You're only as young as the girl that you feel and I'm 25" as if it was in slow motion. Didn't they realise that their whole existence would be judged next to someone with such immense character? Pinching Prince Charles's arse doesn't matter, but Mandela matters. Being obsessed about manifestations of pop, to me that was the moment they blew it.'

And, of course, there's that nice new vicar. 'Tony Blair? Pathetic. The more he apologises about the tobacco-industry climbdown, the more he tries to separate himself and stress his own morality, the worse it gets.' This isn't taproom talk. Not long ago some kind of Blair-Blur pact was mooted. 'In the early stages of his campaign we were of use. There was no connection of ideas - which is understandable because why should anyone pay attention to me- but I was asked to come in, and I was vetted in a very cynical way for some kind of youth think-tank.'

Unlike Noel Gallagher, Albarn turned down his invitation for postelection drinks at Number 10. 'If I want to go there I can take a guided tour. But no, no, no! Musicians shouldn't be going to Number 10. Ever. It's wrong. Anyway now, that lot- Oasis and Labour- have got to start proving themselves. They've forded it for a while. Things are just different here, not much better, maybe better on the surface. Education, the drugs problem, they're all worse.'

Damon's innate pragmatism is coloured by a solid artistic upbringing. His mother worked for Joan Littlewood's theatre company, his father was a lecturer at Colchester Polytechnic, and he is evidently a devoted son. He recently bought a small farm in Devon for his parents' retirement and he's quite happy to acknowledge a desire for his own family with long-time girlfriend Justine Frischmann, leader of Elastica. Unlike most rock stars, who give the impression they're ready to implode at any moment, Albarn is, as they say, sorted. Already under his belt are his first major film (Face, as a getaway driver who gets it in the neck) and a radio play (Radio 3's acclaimed production of Joe Orton's Up Against It). 'I enjoyed both experiences. I was lucky with Face because Robert [Carlyle] and Ray [Winstone] were having such a renaissance nobody noticed me. I could have been an impostor but I wasn't painfully embarrassing. I just about got away with it.'

Other film offers are always around but right now he's concentrating on home life, making another Blur album and writing the music for a recording of Spike Milligan's children's poems ('preferably with Spike reading them'). Before spending Christmas in Bali with Justine and snowboarding out January in Iceland, four major London dates round off a year in which Blur played for 100,000 people at the V2 concerts and finally learned to love America. At Graceland, Albarn discovered why Elvis really was the King-'he serviced a whole chorus line in Paris once'- and developed the regal taste for 'deep-fried peanut butter and banana sandwiches'. In Nashville, he found a booth where he could make a karaoke CD and video. 'I did "Always On My Mind", the Willie Nelson version, dressed in rhinestones, Stetson, frilly shirt, the works.' That's the encore taken care of then.

These days, Damon says, 'I just go with the flow. I'd agree that we are survivors. But that's because we do care a lot and love what we do. I've fucked up massively in the past but it hasn't deterred us from continuing. Seven years now.' His head, in other words, is well screwed on. 'It's certainly not so loose,' he smiles. With that bon mot hanging in the air, Damon leaves for lunch with his sister and the most important part of the day. 'I'm taking my three-year-old niece to the London Aquarium.' Good old Uncle Damon.

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