Interview: We're all a bit more loony now: Once, Margaret Hodge was pilloried for left-wing council policies. But the world has moved on, and she's on the brink of becoming an MP

Few women arouse such strong political passions as Margaret Hodge (odds-on to become an MP at Thursday's by-election in Barking, east London). She ceased being leader of Islington council nearly two years ago, but the 'loonie leftie' label is still attached to her, along with the memory of stories about council-funded gym mats for lesbians.

She thinks people target her for two obvious reasons. One, she is Jewish - by race only, not by religion, she stresses - 'and anti- Semitism still runs deep in the British character'. Her Jewishness less obvious now than it was under her maiden name of Oppenheimer, but the sensitivity remains. Two, she is rich: inherited wealth, at that. Socialists are supposed to be poor. But Eric Heffer, when criticised for dining in West End restaurants, used to say: 'Nothing is too good for socialists.' That is Margaret Hodge's view, too.

She lives in a Georgian crescent in Islington, lined with trees and cast iron railings. The handsome four-storey house is shared with her second husband, Henry, and four children. He is a left-wing barrister and former fellow councillor at Islington, and, like her first husband, Oxford-educated.

At one point in the interview she gestures out of the window at the elegant houses opposite. 'We (this is the Islington council we) bought all this from private landlords,' she says passionately. 'Next door as well. Council- owned. When I was chair of housing (in the late Seventies) we had the biggest housing programme in the country by the time I'd finished. I got an MBE for that.'

Her own house delivers mixed signals. In the downstairs loo there are photographs of her shaking hands with royalty (the Queen in one, the Prince of Wales in another): bit un-socialist, surely? But by the staircase is an 1889 map of London showing levels of poverty. The poorest area, coloured purple, is described as 'vicious, semi-criminal'. This, a day or two after John Major's speech excoriating beggars, sounds remarkably topical. 'Isn't it amazing?' she says. 'Nothing's changed]'

She had a turbulent, at times exotic, childhood. She was born in Egypt 49 years ago to refugee parents, her father from Germany, her mother from Austria. She has very few childhood memories of Alexandria, but did go back there with Henry three years ago, to the village where she was born and spent her first five idyllic years.

By the late Forties, Jews in Egypt were becoming uneasy because of the country's support for the Palestinians. Margaret's father, a steel entrepreneur, had her christened, to simplify her entry to England, and in 1950 the family arrived here. Desperate to integrate, they chose to live in Orpington rather than a more Jewish area. 'But I always felt like an immigrant and a lot of my values and beliefs come out of that sense of being an outsider. I don't consciously remember experiencing anti-Semitism, yet it was always in the background.'

In 1954, when Margaret was 10, her mother died of cancer. Incredibly, the child was never told. 'I knew she'd been ill, of course, but on the day she died someone just said to me, 'Your mother's very ill'. I knew I was expected to cry, though I didn't. No one ever said in so many words that she was dead; I never saw her body and I didn't go to the funeral.

'I reacted by becoming incredibly angry, and for the next few years I made a lot of trouble for everybody. My father had five of us to cope with, poor old thing. My eldest sister was 17 and the youngest was three. We had a series of housekeepers and I got rid of all of them by being so difficult.

'When I was 13 I was sent to boarding school in Oxford, which I hated, although in a way it was the start of my socialism. The school took scholarship children from the Morris motor works at Cowley and fee-paying girls from middle-class families, and the two didn't mix. I was already very aware of class distinctions and I wanted to undermine them. That's also when I got involved in CND. I went on the first Aldermaston march in the summer of 1959.'

The same rebelliousness made her insist on going to the London School of Economics rather than Oxford, like her sisters, where she read Economics and Political Science. She admits doing no work, but had a wonderfully happy time.

After LSE and a Third ('I still dream about that terrible degree'), she started an MA in philosophy, abandoned it; taught, tried to get into television, abandoned that. In 1968, in another rebellion, defying her father's expectations, she married a working-class man. Her husband's father worked in a bakery and he himself was a scholarship boy from Bradford Grammar, 'bright, but very different from me'. He was an economist at the Department of Trade.

Because they needed money, Margaret became an economist at Unilever, where she came across her first experience of sexism. 'As a woman, I wasn't allowed to write reports. I complained to the head of personnel, who said: 'That's what it's like here: either put up or get out', so I got out.'

After more than one unsuccessful pregnancy, she had two children, Nick and Lizzie, followed by terrible post-natal depression. She started freelance work for a market research company and at the same time, crucially, became involved in community politics.

'Our road was being gentrified and old people were being winkled out, so I waged a tremendous campaign on behalf of the indigenous population against the newcomers. Then in 1973 I won a seat as a Labour councillor for Islington.' The rest is well known: her meteoric rise, fuelled by colossal energy and deep socialist commitment. Within two years she was housing chair; within nine leader of the council, and remained leader for 10 tempestuous years. At the same time her first marriage was breaking up, and both she and her husband had semi-public affairs with political colleagues. She was eight months' pregnant when she married Henry Hodge in 1978.

The Tory press fell upon her with howls of joy. Private Eye tried to link her to the South African diamond mine Oppenheimers (no relation). The Mail pursued her with relentless zeal. She still bridles at the mention of the lesbian gym mats. 'I thought, and still do, that every woman should have access to self-defence classes. A lesbian group got mats like everyone else, at a cost of perhaps pounds 500 out of our total budget of pounds 100m. It was a totally unfair media issue.'

She admits that her role as leader gave her enormous power. 'In the early Eighties there was this belief that you used your civic leadership to promote policies and ideology, not just to run local services. There was a feeling that you could change the world from the town hall steps. We were wrong, especially in the area of equality. The radical feminists didn't care about the concerns of ordinary women. Yet, 10 years later, things for which we were pilloried have become orthodox. Staff nurseries, ethnic monitoring, equal opportunity recruitment policies: Opportunity 2000 promotes those.'

After being leader she was wooed by more than one Parliamentary constituency. Instead she said she was quitting politics. Why? 'Children. I had worked 60- 70 hour weeks for long enough.' So why has she changed her mind? - apart from the fact that Jo Richardson's death offered a seat close to London with a 6,268 Labour majority, a rare treasure.

'I don't really know. Isn't it awful?' She peals with laughter. 'I love politics - I do, I really do - I have this great urge to change the world. I hope to goodness I hold on to my belief that politics can do that. And starting something new at almost 50 feels great.

'My children are older, their ages range from 13 to 22. They don't need me around quite so much.' As we speak, a good-looking and extremely charming boy looks in on us. 'All right?' she says. 'Fine,' he says. 'He's doing his exams,' his mother explains.

Does Margaret Hodge believe Labour will win the next general election? Surprisingly, she demurs. I had expected a loyal tirade. Instead she says: 'I think there's a lot to be done to build a positive agenda people will support. We need to develop a vision of democratic socialism in the 21st century. We still haven't really found the language in which to put it across.

'As for the Commons, I'm very conscious of what the boys' club is like. Labour MPs who've been there since 1979 may well think, who the hell is she? But I do hope they'll use my experience. I'm a member of a large hospital trust, and of the Local Government Commission, and I chair a housing association, so I have a whole range of public services interests.'

Ms Hodge may say she's content to be a patient backbencher, but it doesn't sound like it. 'I'm also quite interested in international politics and the emerging role of the UN and world trade in maintaining peace, and I have an agenda for women . . .' She catches my eye. 'My problem is, I've got too wide a range of interests, so God knows what I'm going to do.'

One last question: whom does she support in Labour's leadership campaign? 'Tony Blair's a neighbour of ours . . . we see a lot of him and Cherie.' Too good to be true. Margaret Hodge radiates intelligence, political nous, vitality and charm and she's lucky? As an MP she could be unstoppable.

(Photograph omitted)