Lou Reed, Royal Albert Hall, London

In 1973 Lou Reed had made the crossover from the (Velvet) underground to mainstream success with his Bowie-produced solo album Transformer, and the smash-hit single "Walk on the Wild Side". But his next album, Berlin, so confounded his audience that it only scraped into the American top 100 by two places.

It did better in the UK, but still alienated many of those who had bought into his accessibly chic packaging of drugs and ambiguous sexuality. It was an intimate, insightful, and harrowing account of the drug-fuelled, jealousy-riddled breakdown of a relationship.

Yet it is now seen as a major achievement; if Transformer was all bright colours and Cinemascope scenarios, Berlin has the fascinating, fragile beauty of drying, decaying flowers. Last year Reed finally achieved his ambition of performing it live, in New York for a film by Julian Schnabel, and now he is touring the show, with a 30-piece ensemble including a string and horn section, and children's choir.

Schnabel's sofa-with-a-stripe hangs above the stage (divided domesticity...), and daughter Lola Schnabel's treated silent film of Emmanuelle Seigner plays on the wallpapered backdrop, but the 66-year-old Reed, in brown T-shirt and jeans, commands the attention.

He might find walking quickly difficult, but he can still growl his lyrics in that way that makes you think he's forgotten the words until he confounds you by shoving them all in at the end of the line. And he still fetishises the sound of an electric guitar, thrumming out simple overdriven phrases while Steve Hunter contributes a series of blistering extended solos. The grubby-kitchen-sink intimacy of Bob Ezrin's original production might have been lost, but this is the impact that the material always deserved. The words are sometimes so simple that they teeter on banality, but that's the price you pay for simply telling it like it is, and some of the lines Reed intones lodge like rose-thorns in bare flesh.

Berlin is genuinely affecting and the audience gives a sustained standing ovation at the end. They are rewarded by a three-song encore: "Satellite of Love", "Rock and Roll", and an understated and beautiful new song, "Power of the Heart". This is the last time he'll do Berlin in the UK. Thank heavens, then, that Schnabel's film, Lou Reed's Berlin, is out now.