Take a trip down Old Compton Street any evening and you'll find yourself in the midst of hordes of young homosexual men, swanning up and down as if they owned the place. Some hand in hand, some sitting at tables in front of cafes, some waving through the glass-fronted bars full of more men just like them. You might be forgiven for wondering if you're still in recessed, repressed old Britain.

People unafraid of what passers-by might think? People with money to spend? But then, you're not in Britain. You're in Soho.

Squeezed between the charming flavour of Chinatown and the ugly hard-sell of Oxford Street, Soho has long been an in-between place of delightful confusion and fantasy, a place where the British could escape being British by being Bohemian instead. In the Twenties and Thirties its Bohemian reputation came with its drinking clubs and resident artists. In the Fifties the arrival of foreign habits such as cappuccino, jazz and sex added to Soho's appeal. In the Sixties, the mods, followers of Italian style, made it their home. After the long decline of the seedy Seventies the yuppies colonised it in the Eighties, with their continental-style brasseries, cafes and champagne bars. Then the recession hit, property prices collapsed - and the gays moved in. As if to emphasise their new proprietorship, this Bank Holiday sees the Soho Pink Weekend, including a giant pub-crawl and a carnival in Soho Square.

Gordon Lewis deserves much of the blame. As head of the Village Group, the organisation which spearheaded the gay invasion, he was the architect of the pinking of Soho just three years ago. After an experiment with a bar off Oxford Street called Village West One, he opened in 1991 the Village Soho at the end of Old Compton Street. It was a riotous success.

'I tried to pursue the continental idea,' he explains. 'I wanted to get away from the British pub atmosphere in general and the gay pub thing in particular: shuttered, dark premises, all-male service, alcohol only. I thought, let's introduce colours, plate-glass windows, American-style service, bar-girls as well as boys, cappuccinos, good food.'

Lewis wanted to give gays an alternative to the basement, 'twilight' world of clubs and bars which they had frequented in the past. This is why he chose the name 'Village': 'It's a word that's associated with the New York gay district but it's also a place where people know about one another.'

And gays trooped into this 'village' in their thousands and other gay businesses followed them. Today Soho boasts several new gay bars, a gay hairdressers and even a gay department store. 'I think that the Village formula worked so well because there was a new generation of gays who wanted to be more visible, and were fed up with the world of smoke-filled dives,' says Bill Short, Hotspots columnist with Gay Times. 'Also, there'd long been a demand for more gay venues in the West End but property prices in the Eighties made it impossible.'

Such was the size of this demand, as gays literally came out of the basements, that straight businesses along Old Compton Street found themselves colonised - and richer for it. 'Soho' s coming out of the closet, and it's good news for everyone,' claims Gary Henshaw, one of the organisers of the Pink Weekend. Over thirty businesses, from Soho Men to Ed's Diner, support the event - many of them 'straight'. 'A lot of businesses in the area aren't targeted at gay men,' says Henshaw, 'but most of them are gay friendly.' Emma Piette of the Old Compton Street Society agrees: 'The gay trade is very welcome here; gays have the money to spend and they add a lot of colour.'

Henshaw admits, however that this response is not universal. 'I remember one restaurant owner, who has since moved out, swearing blind when I suggested that he might want to think about how he might cater to the large gay market.' Nevertheless, for all its 'in-yer-face gayness, Soho is not homosexuals only - it just seems that way when you're used to gay invisibility. Many of the more fashionable bars are now going for a mixed clientele. For example the just-opened Atlantic Bar or Gordon Lewis' latest venture, The Yard.

Henshaw argues that this is what distinguishes the Soho phenomenon from what happened in gay 'ghettoes' in America, such as San Fransisco's Castro and New York's Village in the '70s and '80s. 'This isn't about big black metal doors and peep-holes to check out whether you're straight or not, or gay only areas.'

Another key difference between Soho and the American gay districts is that Soho is not a gay residential area. In America much of the political influence of the gay movement stems from its voting strength in gay districts. This means that the Soho gay experience is primarily a shopping experience - politics is most visible by its absence. Ironically it was gay rights group OutRage] who first drew attention to the pinking of Soho by organising a highly successful Queer Carnival last February at which the late Derek Jarman officiated at a ceremony 're-naming' Old Compton Street, 'Queer Street.'

Peter Tatchell of OutRage explains the idea of the Queer Carnival: 'If we could make queers feel confident about being visible in Soho maybe they might eventually feel comfortable about being out in Surbiton.' But he feels ambiguous about the Soho Pink Weekend. 'It's a fun, consumerist event, and that' s fine. It's just a pity that it can't be integrated with an element of queer pride and celebration. You can spend money in Soho any weekend. Soho is less of a community than a queer hypermarket.'

Perhaps this is the politics of Old Compton Street, a desire to express gayness as a lifestyle, as a way of dressing and mixing, rather than an issue. Short thinks so: 'A younger generation has grown up wanting to get away from the problems of homosexuality and emphasise instead its fashionability.'

This is the 'continental' aspiration which the gays have so embraced. Like the yuppies before them, the Soho gays have rejected their outmoded British identity, the discreet closed circle of home-office-pub-home, and looked instead to purchase an alternative and display it to the world. This is the appeal of the 'Village' marketing concept in the Nineties: a community of consumers, a lifestyle enclave where belonging is about commodifying yourself. The Bohemians of Soho, with their emphasis on creativity, have been replaced by the 'flaneurs', the idle strollers of the Nineties - by the 'dinks' (double income no kids) with time and money to burn.

The gays succeeded where the yuppies failed not just because of their famed 'pink pound' but because of their 'cruisiness', their desire to see and be seen, to gaze out on the world and its attractions (and sometimes get their hands on them).

Will all this continue? Or will it burst like the bubbles in the yuppie's champagne cup? Short is sceptical. 'I think that it has probably reached saturation point', he argues. 'Already one major venue is rumoured to be on the verge of bankruptcy. The pink pound has been exaggerated.

Lewis is more upbeat. 'The gay explosion is too big to be a flash in the pan. There's also now the cross-over with straights who like the atmosphere, so there's no reason why it shouldn't continue. On top of that we're now the No 1 gay tourist destination in Europe - forget Amsterdam. If Soho hadn't had the gay market it would be like most of London today: suffering. Instead it's booming.

The Soho Pink Weekend begins with a mass pub crawl at 8pm this Friday in Soho Square, with the carnival on Sunday, ending with a procession and street party in Old Compton Street.

(Photograph omitted)