Manchester: The city hosts the Commonwealth Games in 2002, but remains notorious for its levels of violent crime, with gangster families terrorising retailers and night clubs
"BASTARD," screamed the man from the pavement, looking directly at me. "Bastard, bastard!" His face was puce with anger and his lips were flecked with spittle. "Bastard, bastard, bastard!"

I was not sure what I was supposed to have done. I was sitting at a table at a pavement cafe in St Peter's Square having a coffee - and reading in the Manchester Evening News that crimes of violence in the city had risen by 50 per cent over the past year.

I decided to ignore him, and turned my eyes studiously to the paper. My assailant lurched across the road to the Cenotaph and started hurling bedraggled poppy wreaths into the air before taking his inexplicable anger elsewhere.

"Don't take it personally," smiled the stranger at the next table. The trouble is that we do take it personally. Or as Alan Haughton put it, with an epigrammatic flourish: "We live in a world of anecdotes."

Mr Haughton is the manager of Lifeline, a drugs agency in the city, which works in the dance and rave clubs that are said to be the focuses of the city's violence. A leaked letter from the leader of the city council to the Chief Constable of Greater Manchester Police recently accused the force of failing to combat the "rampant lawlessness" of the protection rackets and the drug dealing in the city's clubland. Is it that bad?

Anecdotes are not much help here. When I asked Ben, a clubber in his late twenties who reckons he has been out on more than 1,000 occasions in the past decade, he replied: "Not at all. I've only seen one incident in that time." Yet when I asked Anna, a 19-year-old student, she responded: "Every time we go into the city we get involved in some kind of violence" - and told tales of bottles raining through windows, of dance-floor punch- ups, of broken noses, and even of a "friend of a cousin's friend" who, while dancing, had been stabbed with a syringe labelled "Welcome to the HIV club".

If the last tale sounds like an urban myth it still tells us something. The thing about a myth is that it may be based on truth, or it may not be, but it becomes more potent than reality and therefore a new reality in itself. The fear of violence is what worries the council leader, Richard Leese, who can clearly spot a threat to investment a mile off. Manchester is to host the Commonwealth Games in 2002.

"The city has already begun to attract extra investment," he said amid the Victoriana of his oak-panelled Town Hall office, "and that that will step up significantly after the 1998 games. All this 'Britain's most violent city' stuff doesn't exactly help, even if the truth is that you have less chance of being attacked than being hit by a car."

The new crime statistics were released for the meeting of the local police authority yesterday. Mr Leese had been on to the Chief Constable ahead of the meeting for an explanation. "He told me that they had changed the way they calculated the figures to include minor assaults, which previously had been omitted."

Did that entirely account for the increase? "He said he can't answer that question. So I don't know - and it appears that nobody knows - whether violent crime in Manchester is going up." Later, the police issued a statement insisting that if you took out the minor incidents of "pushing and slapping" the real increase was not 50 per cent but less than 2 per cent.

But if the Evening News insisted that such explanations "will not wash", there can be no doubting that beneath the mythology there lies the conflation of three separate phenomena: hard drugs, so-called leisure drugs and alcohol.

Hard drugs were at the centre of the city's gun wars in the early 1990s. Heroin and crack dealing are concentrated not in the city centre but in the notorious inner-city suburbs such as Moss Side. In recent years there has been relative calm in these areas, which is to say that only the occasional shooting is reported. Lower unemployment and the wider availability on prescription of methadone, which makes the addicts dozy, are said to be the cause. This is reflected in yesterday's statistics. Smackheads tend to involve themselves in what the police call "acquisitive crimes" - shoplifting, burglary and car theft - which, along with guns offences, are all down.

Today's problems are different. They are centred around the dance and rave clubs, where local crime families, who five years ago were involved in armed robberies, have moved into ecstasy supplying. The kids who take the drug may claim it fills them with universal love, but the same cannot be said for the individuals who supply it.

Club owners in the city have felt powerless, since these gangsters often control the bouncers through payment or intimidation. "Dealers can make pounds 12,000 per club per night," one club owner told me. "Doormen can share more than pounds 3,000 a night as their cut." Anyone who objects is beaten or shot. The gangsters do not even have to produce their guns. A word is enough to secure access and free food and drinks.

It is the spill-over of this culture into the mainstream that has worried the city authorities. Gangsters tried the same tactics at a five-star city-centre hotel recently. Newly opened restaurants that refused to pay protection have been trashed. One major eating chain recently cancelled its opening. Ram-raids on designer fashion shops in the past six months seemed aimed more at intimidation than theft.

"We've had discussions with the managers at Armani and the others and they are adamant that they are not paying protection," Richard Leese said. Still, he is relieved that the first phase of the city centre's closed circuit TV system - which was delayed by the IRA bomb there two years ago - is to open in August.

Moreover, although the local police say little, it is evident that they have changed their approach in the weeks since Mr Leese wrote his stinging letter. They have begun to make their presence felt with "disruptive policing". They have begun towing away cars parked illegally outside a bar frequented by gangsters. Officers in body armour have made appearances in clubs, backed up by armed response units outside. Five-hour rolling roadblocks every weekend for the past five weeks have produced exemplary arrests for drugs and firearms offences. Now, clubs are being encouraged to use out-of-town security firms from as far afield as Birmingham, so that doormen are not vulnerable to the threat "we know where you live".

But there is a third problem. Most casual violence on the streets is fuelled not by drugs but by alcohol. In the past year the city has been shocked by what locals call the Good Samaritan murders, five separate cases in which those who tried to break up fights were killed. No one is sure of the correct response. The authorities hope that the general police clampdown will have its effect. Mr Leese looks uneasy when asked whether the local liberalisation of the licensing laws might partly be responsible. "No, more liberal laws have generally eased the problem. You don't get the 2am closing time tension."

Others, such as Alan Haughton, are more pragmatic. Lifeline is about to produce a set of "What to do if ..." leaflets. If what? "If you see someone collapsed in the street, if you see a guy beating up his girlfriend, if you encounter violence in the taxi queue or kebab shop ..."

What does it tell us about society if self-defence is the only response, I asked. "We can't look at this as anthropologists," Mr Haughton replied. "We have to live here and ask 'What works?'"

So, I was about to riposte, we turn away our eyes. And then I remembered that that was exactly what I had done with the man in St Peter's Square. Suddenly it seemed as good an answer as any.