Books: Capital Punishment - The rise and fall of London as one of the world's great cities is charted in Roy Porter's new history. And the blame for its current plight is laid squarely at Mrs Thatcher's door

THIS is a very clever, very important and very angry book. It is clever because it is by Roy Porter, and if that alone is not sufficient recommendation, it should be added that this is much the best and bravest thing he has yet written. It is important because it makes the whole sweep of London's unique history comprehensible and accessible in a way that no previous writer has ever managed to accomplish. And it is angry because it begins and concludes with a slashing, unanswerable indictment of Thatcherite misrule and mismanagement, which have reduced what was once the greatest city in the world to its present parlous and pitiable plight.

Porter himself is a Londoner born and bred, and his affection for the city, and his sensitivity to its many different identities, are proclaimed on every page. But in seeking to explain its history, he sets it in the broadest possible context. He gives due weight to the impersonal forces which shape any city - geography, trading opportunities, population pressures, market forces. He takes pains to situate London in the history of the nation, of Europe, and of the wider world. And he peoples the capital with a cavalcade of characters - landlords and property developers, magistrates and social investigators, suburban commuters and slum dwellers, outcasts and criminals.

In telling his story Porter constantly bears two essential precepts in mind.

The first is that, throughout most of its long history, London has always been a multi-functional metropolis - a great port, an important manufacturing centre, the seat of government, the home of the court. No other Western capital has been the place of so much diverse activity. The second is that London's history can only be understood as the constant interplay between buildings and their inhabitants, as men and women sought to shape their urban environment, but were themselves shaped by it. 'If buildings take precedence over people,' Porter rightly cautions, 'we get heritage not history.'

This book strikes the appropriate balance throughout. Inevitably, given the paucity of sources, Porter takes us very briskly through the first millennium and a half of London history - its foundation as Roman Londinium, its destruction by Boudicca, the Saxon settlements, the building of the White Tower and Westminster Abbey, Wat Tyler as rebel rouser and Dick Whittington as Lord Mayor. But already many of the crucial themes of London's later history are established: the importance of domestic trade and overseas commerce, the tensions between royal and city government, the cosmpolitan composition of its population, and its freedom from serious public disorder.

When he reaches Tudor times, Porter's narrative slows and broadens. For London was significantly altered and enlarged by the Reformation. Compared with many great European cities, which were devastated by religious wars, it got off lightly. The dissolution of the monasteries led the first great metropolitan property boom. Population soared, so that by 1600 London was one of the five greatest cities in Europe, at the hub of continental trade and finance. So buoyant was its economy that neither the Civil War nor the Great Plague nor the Great Fire halted its inexorable growth. By 1700 its new Wren skyline proclaimed that London was the largest city in Christendom.

During the long 18th century, London authentically established itself as the global metropolis. Under the patronage of the great Whig aristocrats, the West End was laid out and developed. Suburban growth extended to Camberwell, Greenwich, Chiswick and Hackney. In one guise, London was a vast domestic market, stimulating local manufacturers of all kinds: in another, it was the finance capital of the greatest trading and imperial nation in the world.

But its government remained essentially medieval: fat-cat financiers ran the City itself, while the rest of the metropolis was administered by a chaotic array of vestries, boards and parish authorities.

Inevitably, London was the ultimate Victorian city, the setting for the Great Exhibition of 1851, and for the Queen Empress's Jubilees in 1837 and 1897. Between 1800 and 1914, its population expanded more than seven-fold, and its residential growth was on a corresponding scale, thanks to the tram, the Tube and the suburban railway. Its docks were the busiest in the world, its banking and insurance services were unrivalled, and its shops and hotels were of unparalleled opulence. But there was a darker side: cholera in 1832 and 1848-9, the dock strike of 1889, the sweated trades, Jack the Ripper.

And not until 1889 was London's government reformed, with the setting up of the London County Council.

Despite the First World War, London remained the finance capital of the world, and despite Britain's faltering economic performance, the South enjoyed an unprecedented consumer boom during the 1920s and 1930s. Hence Metroland, the North Circular Road and Hoover factories. The Blitz brought Londoners together as never before, loosening hierarchies and snobberies.

And the years between the end of the war and the Queen's coronation were (in retrospect) an Indian summer, when the docks still thrived, East Enders still had their knees-ups at the pub, commuters tended their gardens - and the young Roy Porter was growing up in New Cross Gate, 'a stable if shabby working-class community'.

Since then, Porter argues, things have changed very much for the worse. Of course, there was 'swinging London' of the Sixties, and the 'Big Bang' of the Eighties. But neither concealed, let alone reversed, London's sudden and precipitate decline. As the British Empire disappeared, so did London's financial supremacy. Tokyo and New York became the new world cities. Many firms moved out beyond the green belt, population began to decline, and during the era of Harold Macmillan and Harold Wilson, the planners and the property developers did terrible damage, with their Philistine demolitions, their high-rise slums, and their abominable expressways and fly-overs.

But all this, Porter contends, was as nothing compared with the free- market forces which were so devastatingly unleashed by Margaret Thatcher. During the 1980s, London's manufacturing base collapsed, and its docks went out of business. For the first time in the city's history, unemployment thus became a serious, growing and seemingly insoluble problem. So, in consequence, did crime, violence, homelessness and all the attendant ills of inner-city blight and deprivation. It might have been a good time for international financiers and ambitious yuppies, but for large sectors of London's increasingly impoverished population, there was little or no sign of trickle-down prosperity.

Not since Boudicca has a British woman done so much damage to London as Mrs Thatcher, culminating in her abolition of the Greater London Council in 1986 -a petty and vindictive act which leaves London alone among Western capital cities with no democratically elected government. And behold the results] Public transport is a shambles, pollution reaches unacceptable levels and the Victorian infrastructure is disintegrating. Like its predecessor, the present government lacks the vision and the will to make the necessary resources available. London has not yet reached the depths recently plumbed by New York or Newark, but the prospects are far from being encouraging.

Thus described, Porter's London was once no mean city, which has been allowed to become a very mean city indeed. Porter's book is simultaneously a love letter to London and hate mail for John Major's administration. As such, it should be read by every Londoner of whatever political persuasion; by every Briton who lives north of Watford or south of Croydon; and by anyone, anywhere, who is concerned about the current problems and future prospects of the world's great conurbations. For cities, like nations, can only be understood in an historical perspective. It is that perspective which this book so brilliantly provides. In more senses than one, it is a capital history.

'London: A Social History' by Roy Porter is published this week by Hamish Hamilton at pounds 20 (Photographs omitted)