The groovy emporia of Swinging London died out in the mass-produced Eighties. Now they're back, says James Sherwood
The basement walls are painted ice cream pastel. Funky PVC sofas are filled with bright young things sipping cappuccino and nibbling bagels. A visiting fashion editor casually answers the phone while a svelte "It" girl in Tocca flicks through club flyers. Sugared almond slip dresses, pretty print T-shirts and sparkly objects surround the formidably hip crowd on the sofa. Welcome to Shop, one of the new breed of boutiques springing up in London's Soho and Covent Garden.

Boutiques went out of fashion with loon pants and polycotton. Small, independent shops stocking a variety of fashion labels, they were born of the youthquake of the Sixties and Seventies, then rapidly killed off as the British fashion industry was engulfed by the slick and ever-proliferating retail giants. But the cloning of British high streets - Dolly the Sheep has nothing on Kookai - has finally created a backlash. What self-respecting son or daughter of Cool Britannia wishes to shop in the same place as their parents?

Nestled between the gay bars and Italian delis of Soho, Shop brings a slice of NYC's East Village to London. Fresh, funky New York labels are the tools of the trade, but owners Max Karie and Pippa Brooks know it's the vibe that makes a boutique. Attitude is out and the pressure is definitely off. "We didn't want Shop to be too perfect or contrived," says Karie. "We like the downtown, improvised feel of the place and encourage people to just come in and hang-out... as long as they bring a bagel."

At their best, boutiques bridge the gap between exclusive and accessible, giving expression to the maverick fashion spirit for which Britain is known. "We stock real clothes with individual spirit," says Max Karie. "If people want to be intimidated they can go to Bond Street."

Karie and Brooks first set up Shop in the front of a Frith Street laundry. It was that kind of improvised chic that attracted photographers from French Vogue. Shop is launching an own label, Shop Girl, for Spring 98, but they have no intention of expanding out of boutique exclusivity. "Shop was an experiment," says Karie, "and the experiment worked. The plan is we don't have a plan."

"Some days you think, 'Oh my God, what am I doing?' and then other days everyone pops in," says Michael Kostiff, owner of World. A cult boutique in the late Eighties, World sold South American knickknacks picked up on Michael and partner Gerlinda's travels. It was frequented by the DJs, fashion designers and drag queens who flocked to Michael and Gerlinda's legendary Kinky Gerlinky parties. Reopened six weeks ago, World is now a grab bag of Masai beads, Mexican masks and unique designer collections by cult London figures such as Anita Pallenberg and Malcolm McLaren.

Michael greets you with a seen-it-all smile and a Marlboro Light. Everyone who is anyone has "popped in" since he reopened. Maybe it's more than coincidence that World visitor John Galliano's couture collection for Dior was inspired by the Masai.

The same experimental feel initiated the birth of the boutique in the Sixties, most famously with Biba, Barbara Hulanicki's patchouli-scented boutique crammed with retro clothing, signature purple make-up and wild accessories. The Sixties youthquake demanded a more relaxed, carefree approach to shopping. The boutiques that sprang up on Carnaby Street and the King's Road were a cornucopia of ethnic, oriental and psychedelic fashions. Hippy chicks hung out there, the new music blasted out of each entrance and young baby-boomers flocked to buy Mary Quant, Ossie Clark and Zandra Rhodes. "It was magical," says Biba collector Moira Ramsay. "Each boutique was like a different world. At Biba, you'd find an assistant reclining on a leopard-skin bed strewn with bras and knickers... and that was the lingerie department. It was the first time fashion was aimed at young people."

In fact, teenagers spent more time hanging out in the boutiques than actually buying anything, but somehow the shops thrived. That was until big business picked up the formula and mass-produced it in chains such as Chelsea Girl and Miss Selfridge. Shoppers loved it, and the boutiques could not keep up, though some, like Biba, tried. But the small shops' commercial naivety belies their very important function in the fashion industry: supporting young design talent.

Boutiques provide an aesthetic and atmospheric frame for the clothes. Daniel Poole has been designing club-inspired clothes for nearly a decade. But it was only when he teamed up with hairdressers Rox last year that Daniel Poole at Rox really found its spirit. Open through the evenings until 10 pm, it is the kind of place you visit for five minutes only to emerge hours later with a new disco top, new hair colour and new boyfriend.

Old Compton Street is Soho's gay community catwalk and Daniel Poole at Rox's window provides a front row seat for the show. Ashtrays and sofas are placed around the two floors, while Happy House and Techno play on the sound system, mixed by guest DJs. "It can be a bit embarrassing," says manager Steve Montgomery, "when a bunch of friends are jiggling about and I'm trying to look after a customer, but it's all part of the scene, really."

This synergy of shopping and socialising is at the heart of boutique philosophy. Rachel Makinson, manager of Covent Garden's Pop Boutique, deliberately encourages a laid-back party atmosphere. "Pop Boutique is totally relaxed and friendly. We have mates permanently coming in for a gossip and a flick through the rails."

Pop Boutique is a vintage clothes shop that has eschewed the Granny's Attic look and gone back to original Sixties interiors. It's a place where Noel Gallagher, REM and Paul Weller shop for their stage clothes. Last week, the shop celebrated its first birthday with a party for regular customers and friends ("One and the same thing," claims Makinson). In the perfect boutique combination of business and pleasure, everyone got a glass of wine and 10 per cent off.