The gay village, Canal Street, Manchester

There has been a "gay village" around the Rochdale canal in Manchester for as long as Frank Pearson can remember. He's 45 now, and was going to the Rembrandt Hotel in Sackville Street when homosexuality was still illegal. Up until 12 years ago, recalls Peter Bessick, who now runs the Rembrandt, the district was full of cotton workers by day and prostitutes by night. Then the warehouses emptied and only the prostitutes were left.

Then, in 1990, along came Manto, the first of the capital-G Gay Village cafe bars, and the first gay venue in Manchester to come out of the closet with an open plate-glass front. It was stunningly well-designed. It sold decent food and herb teas. It was civilised and sophisticated and extremely cool.

Just over five years later, and the Village is packed out. Frank Pearson followed with Metz in 1994. A local brewery was going to make Via Fossa an Irish pub until its gay manager suggested that ``irishry'' wasn't really where 1990s Canal Street was at. The Manto Group itself has moved into property, converting one of the district's disused warehouses into loft-style yuppie flats. "City-centre living: that's going to be the next big issue," Julie Collinson at Via Fossa points out. "The way the area's developing into housing. It's going to be really interesting, seeing if the Village can make city-centre living work."

Usually, ghettoes are ghettoes because the mainstream has no interest in them. But the Village is so successful, everybody wants to be in on it. The regeneration-crazy city council adores it. Liberal straights adore it. Around the Village in general, there's anxiety about customers "pretending to be gay", and about "the true Village" being ruined by incomers.

Frank Pearson himself made his first fortune out of Foo Foo Lamarr, a raucous cabaret queen played by himself in drag. Since the 1970s, Foo Foo has been playing mainly to straight audiences. "You can't be gay and not accept all sorts," he says. "That's what I try to do with Metz." And yet, Frank also worries that the Village may end up "diluted by big business, bringing the wrong sort of people in". "All we want," says Nicky Pennington at Manto, "is for you to say the Village is completely brilliant." And yet, it is precisely because that is what everybody keeps saying that "the true Village" is getting worried. "Personally, I think of myself as me first and gay second," considers Jenks, maitre d' to Metz. "Black or white, rich or poor, straight or gay: I don't care what a person is so long as they behave themselves. And personally, I think that's the way the world is going. All the old boundaries are beginning to break down. But I know a lot of gays and lesbians feel threatened by the way their culture is going mainstream. If it gets diluted any more than it has already, I wouldn't be surprised if the Village just ups and moves."

Even as he is chatting, Jenks has half an eye on a table of manifestly non-gay lads, sniggering as they sip on their pints. "The worst sort are the office workers, the straight white professionals. Most people understand the need for boundaries. Except for privileged people, people who are not used to getting turned away."

A VISITOR'S GUIDE

LOCATION: Canal Street, between Sackville Street and Minshull street.

PLACES: Manto: 46 Canal Street, M1 (0161-236 2667) 12noon-11pm, Mon-Sat; 12noon-10.30pm, Sun; 2.30am-6am Sat-Sun "Breakfast Club" after-hours night.

Metz: 3 Brazil Street, M1 (0161-237 9852) 12noon-11pm, Mon-Thur; 12noon- 12midnight Fri-Sat: 12noon-11 pm Sun.

Via Fossa: 28-30 Canal Street, M1 (0161-236 6523) 11am-12midnight Mon- Thur; 11am-2am Fri-Sat; 12noon-10.30pm Sun.