Writers and their adventures in literature. This week: Anna Funder describes life in Berlin among the remnants of the old Communist regime

Born in Melbourne in 1966, Anna Funder worked as an international lawyer and documentary film-maker before turning to writing. In 1997, seven years after the fall of the Berlin Wall, she went to former East Germany to work as writer in residence at the Australia Centre in Potsdam. Here she interviewed those who had lived under the regime of the GDR and its secret police and ex-Stasi men themselves, providing a raw and frank account of life in Germany before and after unification. This extract is taken from her book 'Stasiland'.

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I take my cup to the living-room window. In the park there is snow on the ground and the trees, light on light. My breath mixes with coffee steam on the glass. I wipe it away. In the distance lies the city, the television tower at Alexanderplatz like an oversized Christmas bauble, blinking blue.

I can't see it but I know that just near there, on the site of the old Palace of the Prussian Kings pulled down by the Communists, is the parliament building of the GDR, the Palast der Republik. It is brown and plastic-looking, full of asbestos, and all shut up. It is not clear whether the fence around it is to protect it from people who would like to express what they thought of the regime, or to protect the people from the Palast, for health reasons. The structure is one long rectangular metal frame, made up of smaller rectangles of brown-tinted mirror glass. When you look at it you can't see in. Instead, the outside world and everything in it is reflected in a bent and brown way. In there, dreams were turned into words, decisions made, announcements applauded, backs slapped. In there could be a whole other world, time could warp and you could disappear.

Like so many things here, no one can decide whether to make the Palast der Republik into a memorial warning from the past, or to get rid of it altogether and go into the future unburdened of everything, except the risk of doing it all again. Nearby, Hitler's bunker has been uncovered in building works. No one could decide about that either - a memorial could become a shrine for neo-Nazis, but to erase it altogether might signal forgetting, or denial. In the end, the bunker was reburied just as it was. The mayor said, perhaps in another 50 years people would be able to decide what to do. To remember or forget - which is healthier? To demolish it or to fence it off? To dig it up, or leave it to lie in the ground?

Between the Palast der Republik and my apartment lies the neighbourhood of Mitte, the old centre of Berlin, with its grey buildings and white sky and naked trees. Streets near here are being renamed: from Marx-Engels-Platz to Schlossplatz, from Leninallee to Landsberger Allee, from Wilhelm-Pieck-Strasse to Torstrasse, in a massive act of ideological redecoration. Most of the buildings, though, are not yet renovated. They have largely lost their plaster and are scraped back to patches of brick; they look like tattered faces after plastic surgery. They are as they were before the Wall fell, except for the sprouting of domestic-size satellite dishes from the window-frames; a sudden white fungus, tuned to outer space. The trams are western now - they were among the first things to cross over here after the Wall came down. They are a flash of sighing yellow suspended from strings, shifting through this greyscape.

A tram stops right outside my apartment. It obeys a set of lights here under the window, though on the other side of the street there are none to match. I see the driver has the tabloid - screaming red-and-black headlines - on the control dash. Behind him sit tired-looking people for whom this day has come too soon.

I cannot fathom why these lights make the tram halt under my window. The stop itself is half a block away at the corner. Right here, the doors never open for passengers; they just sit, arrested and accepting. It is odd, the sight of a tram with a row of cars behind it stopped here for no pedestrians, no passengers, no reason, while on the other side vehicles continue unimpeded up the hill into Prenzlauer Berg. The lights change and the driver, still looking at the paper, moves a lever and slides the tram into action.

I go out for the paper and bread, and walk through the park. In summer this park is festooned with motley groups of drunks and punks. In winter the punks claim the underground stations for warmth, while the drunks install themselves in tram shelters. Today the corner stop is occupied by an old man with a mane of matted locks, a huge felt beard and flowing black robes. His belongings, in plastic bags around him, double as pillows. He is timeless and grand like someone walked in from another century - a Winter King. As passengers alight from trams he acknowledges them as if they were supplicants paying their respects to his throne, nodding to each and waving them on their way.

I cross to the bakery past a billboard that reads "Advertising Makes Better Known". My baker holds, to some extent, with tradition. He makes wholegrain and rye and country loaves, stacked as oblong bricks on the back wall. But now, freed of state-run constraints on his ingenuity, he appears to be conducting his own personal experiment in bestsellerdom. On the left-hand side under the glass counter are the baked goods: iced doughnuts and cheesecake and blueberry crumble. On the other side, also under the glass and laid out just as neatly, is a bewildering assortment of fat paperbacks with embossed titles.

I am served by a woman with a bad perm. She's wearing a T-shirt which has a lion's face on it - the lion has winking sequins for eyes placed exactly where her nipples must be. I buy half a loaf of rye and ask no questions about the books. When I reach my building I see that the Winter King has crossed here to the place where the tram stops for no reason. He waits, but no passengers emerge for him to receive. Instead, as I approach he turns to me and bows, long and dangerously low.

'Stasiland' by Anna Funder (Granta Books, rrp £12.99). Readers of 'The Independent on Sunday' can buy the book for the specially discounted price of £11 (including postage and packing within the UK). Contact Granta (0500 004033) and quote 'The Independent on Sunday'. Offer ends on 31 July.

Follow in the footsteps

Rebirth of a city

Mitte means "middle" and, until the Berlin Wall carved the city in two, Mitte district was the hub of political and social activity in the city. Since the Wall came down in 1989, Mitte has regained its standing and regeneration has begun on a grand scale.

Gate to unity

A stroll along Under den Linden will convince any visitor of its gracious pedigree. This famous boulevard runs west towards the Brandenburg Gate and the manicured Tiergarten. The Gate, built in 1791, was one of 18 neo-classical gates to adorn the city, marking the boundary between East and West Berlin. Another Mitte landmark is the Reichstag, renovated by Sir Norman Foster. The reworked original dome has become an attraction in its own right, offering spectacular views.

Getting there

Returns from Heathrow with British Airways (0845 7733377; www.ba.com) start at £88. Air Berlin (0870-738 8880; www.airberlin.com) flies from Stansted from around £115 return.

The elegant Hackescher Markt Hotel (00 49 30 2 8003-0; info@hackescher-markt.com) is on a quiet street in a lively area. A double costs €155 (£109) including breakfast.

Further information

German National Tourist Office (020-7317 0908; www.germany-tourism.de).