The Germans who want the Wall back

Residents of an exclusive neighbourhood are rebuilding parts of the Communists' most notorious structure

The once communist-controlled, Prussian city of Potsdam lies only a few kilometres from Germany's formerly divided capital, yet two decades after the fall of the Berlin Wall, the elegant ex-garrison town has become home to the country's rich and famous with stratospheric property prices to match.

But when Germany marks the 20th anniversary of its reunification next month, the wealthy denizens of Potsdam will be celebrating the event behind bits of a new and self-constructed "Berlin Wall" that runs along sections of the old divide to keep the common public away from their luxury homes.

The development has caused angry protests: "These influential villa owners want to get their way against the wishes of the general public," complains Walter Raffauf, the leader of a campaign group that wants to keep the site of the former Berlin Wall open to the public for posterity.

Berlin's new "Wall" has not simply given rise to protest groups. It has sparked a furious row about property rights involving Chancellor Angela Merkel's government, and provoked an angry backlash from Potsdam residents who claim their hard earned freedom is being abused by rich toffs. "You arseholes just are gloating over your wealth," is how a pair of villa residents were recently greeted by a passing Potsdam cyclist as they stood in their immaculate gardens.

The acrimonious dispute about walls, borders and freedom is being fought in the elite and genteel Potsdam suburb of Babelsberg – a district which before the Second World War was renowned as Germany's "Hollywood" because of the number of film stars, directors and producers who lived in its luxurious villas.

Reduced to crumbling ruins during the Cold War, the villas have since been bought up and fastidiously gentrified. They now serve as homes for people such as the star German conductor Christian Thielemann, Germany's famous gay fashion designer Wolfgang Joop and the film director Volker Schlöndorff, acclaimed for his award winning production of the Günter Grass novel The Tin Drum.

Only last week Potsdam topped Germany's list of cities with the most desirable and expensive properties. Villas there can easily fetch up to €5m each. The current dispute, however, is confined to a strip of land that runs along the southern shore of Potsdam's sedate Griebnitzsee lake, which forms the watery boundary between the town and Berlin, a mere stone's throw away to the north.

On August 13, 1961 at the height of the Cold War, Communist East German border guards fenced off the southern shores of the Griebnitzsee with barbed wire. Over the ensuing months and years, the wire was gradually replaced by the Berlin Wall, with watchtowers, searchlights, tracker dogs and Kalashnikov-toting border guards with orders to shoot would-be escapers to neighbouring capitalist West Berlin.

Mr Schlöndorff, who acquired one of the Griebnitzsee villas shortly after the Wall fell in 1989, remembers looking out of his back garden at bits of demolished Wall and crumbling, vandalised watchtowers. "It was pretty grim," he told Der Spiegel magazine this week. "Something between a rubbish dump and no-man's land." Mr Schlöndorff said he used to regularly go jogging along former border guards' patrol track that ran the length of the old Wall.

Today however, much of the directors' former running route is criss-crossed with new metal fences, mounds of earth, and hedges barring the way. The barriers make up the "new" Berlin Wall at the centre of the dispute. The villa owners want the public access to the lake that is afforded by the footpath (formerly border patrol track) stopped. "The law must really be the law," insisted Mr Thielemann, who owns one of the villas and who has been infuriated by the public invading the bottom end of his garden interrupting his view of the lake.

Like many of the other lakeside villa owners Mr Thielemann says that when he brought his property, he was guaranteed exclusive access to the lake and that there was no mention of a footpath. However the Potsdam city government has sided with its ordinary citizens and wants to keep the former border guards path along the shore of the lake open to the public. By contrast Reiner Geulen, the villa owners' lawyer is adamant that property right be upheld. "The Potsdam politicians are still communist East Germans at heart," he said. Potsdam's attempts to buy the path came to nothing after the residents raised enough cash to outbid the city.

The dispute has since prompted protests from the government of the surrounding German state of Brandenburg which wants the Wall path opened to the public. However, Mrs Merkels' Finance Minister has since intervened and sided with the property owners. But with the Merkel government now effectively backing the villa residents, the only way Potsdam's public will regain access to the Greibnitzsee path along will be through the intervention of Germany's upper house of parliament, the Bundesrat.

For the Potsdam protesters who are opposed to the villa owners' new Wall the dilemma is rough justice: "Twenty years ago we fought to bring down a wall that kept the capitalists away from the East German proletariat," one told German television, "Now we have got a new wall that keeps the proles away from the capitalists."

The residents: The nouveaux riches behind the rancorous dispute

Christian Thielemann

The respected conductor currently directs the Munich Philharmonic, but is scheduled to take charge of the Staatskapelle orchestra in Dresden in 2012. However, he is also thought to be a difficult man to deal with, and has fallen out with various institutions and orchestras during his career.

Wolfgang Joop

One of Germany's best known fashion designers, Joop added an exclamation to his name and founded a fashion and lifestyle brand in 1981. JOOP! became particularly well known for its perfumes, but Joop sold his stake in the company in 2001. Since then the couturier has launched the "avant-garde luxury brand" Wunderkind and penned a novel, an autobiography and a cookbook.

Volker Schlondorff

The film director of the New German Cinema group is best known for his 1979 adaptation of The Tin Drum, by fellow German Gunter Grass, which won both an Oscar for Best Foreign Language Film and the Palm d'Or. He spent his formative years studying and working in France, as an assistant to people like Alain Resnais and Louis Malle. In 2002 the 71-year-old received the highest French order, Knight in the national order of the Legion of Honour.

Holly Williams