In the third part of our exclusive serialisation we look at the publication of 'The Naked Lunch', the battles over attempts to censor it and life in the Beat Hotel
The infamous Olympia Press seemed the most obvious home for a book such as The Naked Lunch and Ginsberg approached them through one of their editors, Sinclair Beiles. Founded in 1953 by Maurice Girodias, Olympia had gained its notoriety by publishing the obscure, the pornographic and the transgressive.

Girodias had already notched up De Sade, Bataille, Henry Miller and Alexander Trocchi to his credit, and was encouraging the last of these to write pseudonymous porn to subsidise his more serious work. Yet Girodias at first rejected The Naked Lunch, claiming that the manuscript was in such a mess "you couldn't physically read the stuff ... The ends of the pages were all eaten away by rats or something."

Ginsberg sent a section to Charles Olson, who had established a modernist manifesto called the Black Mountain Review. The extract was published and the murmurings that it stirred eventually convinced Grove Press in New York to pick up on the book. Olympia was quick to respond, paying Burroughs $800 and publishing the novel in 1959, with Grove following suit in 1960.

The Naked Lunch was an event as much as a novel. It became the essential purchase of the aspiring hipster, particularly in Britain where copies had to be smuggled through customs. It was "cult" incarnate - an underground collage of comic- strip surrealism which juxtaposed sexuality with sadism, business with crime, and politics with madness to the extent that such terms became interchangeable. The Naked Lunch was almost instantly iconic - a signifier of its own vagrancy.

Relations between Burroughs and Ginsberg were no longer fraught with sexual tension - Burroughs had begun to warm to Orlovsky, prompting Ginsberg to write to him: "He no longer needs me like he used to, he doesn't think of me as a permanent future intimate sex schlupp lover."

In fact Burroughs was undergoing psycho-analysis and was beginning to re-evaluate his entire attitude to sex, reporting to Ginsberg that "I don't know if I am interested in man or woman or both or neither. I think neither. Just can't dig the natives on this planet."

The Beat Hotel played host to the cream of Parisian bohemia, the Beats' ascendant celebrity bringing them into contact with figures such as Man Ray, Celine and Marcel Duchamp. One of Burroughs's most significant encounters, however, was with a less well-known artist - a gay, androgynous, British- born painter called Brion Gysin. Although Gysin had run a restaurant in Tangier, the two men had found little common ground there but in Paris their friendship flourished as they discovered a shared interest in conspiracy, magic, altered states and misogyny.

They became fascinated by the 11th-century Persian sect known as the Assassins, whose leader, Hassan I Sabbah, arrived at the maxim: "Nothing is true, everything is permitted." This was to become their aesthetic code of conduct, and certainly underpins their use of the cut-up.

When Ginsberg returned to America, Gysin took his place in the Beat Hotel. Burroughs has always credited Gysin with discovering the cut-up, although the Dada poet Tristan Tzara had caused a riot decades earlier when he composed a poem by pulling words out of a hat. Whatever its origins, the cut-up can be seen as a logical extension of their mutual trajectory.

In The Naked Lunch Burroughs had used writing against itself, commandeering language so that it might "Rub out the Word". The critic Tony Tanner has compared this prose to the music of John Cage, whose random (sometimes silent) compositions cause us to reassess the pact between composer and audience and the relationship between authority and structure. As Burroughs put it, "Cut-ups destroy old false constructs and models of reality", and he called his experiments "a project for disastrous success".

Burroughs's many collaborations with Gysin represent the "War of the Words" - an assault on the imprisoning totality of language by celebrating the random, a word's chance encounter with its own free-floating status. Just as we do not listen to Cage's silences, we do not read the Burroughs/Gysin books. They are textual tantrums that need to be approached as concepts, not as narratives. To disregard them as "unreadable" is no more helpful than disagreeing with a joke or a riddle.

While Burroughs was exploring new possibilities for writing, The Naked Lunch was becoming the subject of a narrative all to itself.

On 20 January 1962 a bookseller in Boston was arrested on obscenity charges for selling copies of the book. The trial was set for two years later and the defence called both academics and writers to testify to the book's merits. John Ciardi, poetry editor of the Saturday Review, praised "a substantial work by an author of some talent and of serious commitment", while Norman Mailer spoke of an "artistry more deliberate and more profound than I thought before". Ginsberg was also called and discussed the function of addiction as a metaphor for social critique.

Their testimonies fell on deaf ears and the book was found to be obscene. It was only on appeal, handed down on 7 July 1966, that the verdict went in the publisher's favour, thus marking the end of (official) literary censorship in America.

The avant-garde British literary publisher John Calder was more cautious, understandably wary of an establishment who could ask whether or not we should allow our wives and servants to read DH Lawrence.

In August l962, he organised a conference in Edinburgh to address the question "How does the novel form stand today?" Over 70 writers were invited, including Mailer, Mary McCarthy, Henry Miller and Burroughs himself. McCarthy gave a spirited defence of The Naked Lunch, claiming that it "has some of the qualities of Action Painting. It is a kind of Action Novel". (She would echo these sentiments a few months later in a review for the New York Review of Books in which she compared Burroughs to "a vaudeville performer playing ... in front of the asbestos curtain of some Keith Circuit or Pantages house long since converted to movies".)

Mailer typically played devil's advocate and floated the idea that too much contemporary fiction was immoral in its refusal to "enter this terrible borderland of sex, sadism, obscenity, horror, and anything else ... that is why I salute Mr Burroughs's work, because he has gone further into it than any other western writer today".

Burroughs was called upon to give his opinion on censorship and argued that if it "were removed, perhaps books would be judged more on literary merit, and a dull, poorly written book on a sexual subject would find few readers ... The anxiety and prurience of which censorship is the overt political expression has so far prevented any serious scientific investigation of sexual phenomena."

The event put Burroughs firmly on the map and convinced Calder to produce a "reader" - a book that contained sections from The Naked Lunch, as well as from The Soft Machine and The Ticket That Exploded, which were also produced in the early Sixties.

Burroughs then added some new material to produce another book, Dead Fingers Talk, published in 1963. Neither work was brought before the court, but that other bastion of the British establishment, the Times Literary Supplement, declared war instead.

John Willet instigated proceedings with a review entitled "Ugh" - a scathing attack on what he saw as Burroughs's sordid fascination with bodily functions, disease and sexual deviance. It was the beginning of a 13-week-long correspondence that included Anthony Burgess and Michael Moorcock for the defence, as well as the moral outrage of Dame Edith Sitwell and the publisher Victor Golancz, who characterised the books as "bogus high-brow filth".

What it lacked in literary acuity the "Ugh Correspondence" made up for in publicity, and Calder published The Naked Lunch in 1964.

Reading the book today, one is struck by just how eerily contemporary Burroughs's landscapes proved to be. His fantasy of a sexually transmitted disease that nourishes itself off contact with strangers was an uncanny prophecy of the Aids-conscious culture. The film-maker David Cronenberg once remarked that he had been making movies about Aids long before Aids had been discovered, so it is hardly surprising that he should eventually choose to film a novel that fits the same bill for his explorations of invasion and decay.

The hyper-reality of many of the novel's routines foreshadows what post- modernism would later term the "simulacrum", the point at which the authenticity of our experience dissolves all around us and we become consumers of our own reality. For a novel written through the Fifties and published in the Sixties, The Naked Lunch stands as one of the most astute chronicles of the nineties.

Tomorrow: The reluctant icon who led artists into forbidden areas

The 'Priest' They Called Him: the life and legacy of William S Burroughs. By Graham Caveney (Bloomsbury, pounds 20). To buy this book for pounds 17 (inc p&p), tel 01634 297123 or see