The Melbourne identity: The former hub of Australia's gold rush is now a City of Literature

Lonely Planet's Tony Wheeler reveals Melbourne's novel story

My name's on the building. Or should be soon. In 2008 Melbourne became the second Unesco "City of Literature" (Edinburgh beat it by a year). As a result, the Victorian state capital decided to establish a Centre for Books, Writing & Ideas, which they named the Wheeler Centre after my wife, Maureen, and me. Our first Lonely Planet guidebook was published out of a basement flat in Sydney in 1973, the second from a cheap Chinese hotel in Singapore in 1975. From there to book number 100 million – a copy of the 15th edition of our Australia guide, which rolled off the presses recently, it's all been in Melbourne.

First there was a nondescript flat off Chapel St in South Yarra (nowadays the King's Road of Melbourne), then a succession of places in Richmond (the Thessaloniki of the Antipodes when we moved in, Little Saigon by the time we moved out), a modern office in the suburb of Hawthorn and finally a riverside building in Footscray – the "wrong" side of the city when we moved there 10 years ago, much more respectable today.

As with the Lonely Planet HQ, Melbourne's fortunes have proved capricious. Australia's literary and publishing history can be divided into two eras, defined and differentiated by the mode of transport: ship and plane.

In the days when you travelled down under by ship you sailed out from London around the Cape of Good Hope (or, later, through the Suez Canal), on around the south of Australia and your first stop was Melbourne. So British publishers got off the ship in Melbourne and set up shop. Oxford University Press and Penguin are in Melbourne. When planes arrived, you flew across the Pacific from the US. Sydney was your first stop so American publishers got off the plane there; as a result, that's where Random House and Harper Collins are located.

Sydney had already been in existence for almost 50 years when, after one false start, Melbourne was settled. Of course there had been Aboriginal populations in the area far earlier: if you know where to look, traces of their presence are still around. In the car park by the Melbourne Cricket Ground, less than a mile from the centre of Melbourne, a "canoe tree" can still be seen, its bark cut out to make a simple boat for the Yarra River which flowed through the MCG site in those days.

In 1851 gold was discovered near Melbourne. Within three years the population had zoomed from 80,000 to 300,000. Soon Sydney was the poor relation as Melbourne metamorphosed into "Marvellous Melbourne", the second city in the British Empire, topped only by London.

Gold wealth brought magnificent public buildings including a public library, opened in 1856, that was free to "every person of respectable appearance", although it was required that their "hands are clean". Unfortunately, its wonderful glass dome was far less than watertight and had to be covered in copper, until a renovation costing more than £100m restored it to its original glory at the start of the new millennium. The library shared its building with the Melbourne Museum, until that moved out to superb new quarters in 2000 – leaving the space which has now become the Wheeler Centre.

Our Melbourne arrival in 1975 was more chance than planned, but it coincided with a time of literary upheaval. A spate of new Australian publishing houses had appeared – home-grown places, not London or New York offshoots – and the most active were in Melbourne. Outback Press is long gone, although one of its founders, Morry Schwartz, is still a major force in Australian publishing. Morry manages a Jekyll and Hyde existence (choose for yourself which side is Jekyll, which side Hyde). Half the week he's the heart of capitalism, a property developer. The big QV centre with shops, restaurants, bars, offices and apartments overlooking the Wheeler Centre and the State Library? That's one of Morry's creations. The other half of the week he's the publisher of the left-leaning Monthly magazine and Black Inc books.

Around the same time as Outback Press and Lonely Planet got started, Hilary McPhee and Diana Gribble rolled out McPhee Gribble and soon put a host of now-familiar names into print including Tim Winton, Murray Bail and Helen Garner.

Melbourne's literary history goes back much further, though, to the colonial era with authors including C J Dennis and his Sentimental Bloke. Frank Hardy's 1950 novel Power Without Glory traced a seamy tale of Melbourne politics and business that could almost be used as a street map for Collingwood, the city's equivalent of London's East End. As a result of such detail, Hardy was sued (unsuccessfully) for libel. And Nevil Shute's 1957 post-nuclear-destruction tale On the Beach was also set in Melbourne. Sadly, it's probably not true that Ava Gardner, starring in the movie of the book, said that if you were going to make a film about the end of the world then Melbourne was the perfect place to make it.

The novel that brings Melbourne to life for me is always going to be Monkey Grip. Published in 1977, it kicked off the literary career of Helen Garner and the publishing story of McPhee Gribble. It's all sex, drugs and rock'n'roll as Nora cycles the streets of Fitzroy and Carlton, past Victorian verandas trimmed with elegant cast-iron lacework. It was a good film too, with pub-rock scenes featuring the hot band of the era, The Divinyls.

In fact, some of the best descriptions of modern Melbourne are sung, not written. One of those singer-songwriters will be joining the writers at the centre's opening event tonight. Over the years Paul Kelly has summed up Melbourne better than anybody. Any Melburnian would know exactly where you go to gaze "over the bridge to the MCG" and check a clock which "says 11 degrees": from the pedestrian bridge across Brunton Avenue and the railway tracks you can see the MCG in one direction and the clock atop the silos where the South-Eastern Freeway crosses Punt Road. In his much-loved song "From St Kilda to Kings Cross" he not only links the two cities' sin and backpacker centres in Melbourne and Sydney, he also offers to trade all of Sydney Harbour (land and water included) for "one sweet promenade" along St Kilda Esplanade, although he adds that it is a place "where the palm trees have it hard".

Melbourne has booksellers as well as publishers, authors and libraries. John Pascoe Fawkner, one of the pioneering settlers, opened the city's first hotel, published its first newspaper and was probably its first bookseller, since he sold books from his hotel room. His statue crouches – he appears to be mapping out Melbourne with a stick – on Collins Street near Queen Street.

The city's most celebrated bookshop is Cole's Book Arcade which closed in 1928, 10 years after E W Cole's death. At one time it may well have been "the biggest bookstore in the world". Go through 234 Collins Street, past the modern Dymock's bookshop, and you emerge into Howey Place. The glass-and-iron roof above the street once sheltered all those books, along with distorting mirrors and cages of monkeys. Now there's an idea waiting for Waterstone's.

Melbourne's publishing presence has also shifted in recent years. Today the city is probably in the lead when it comes to digital publishing in Australia. Hopefully that will be reflected in the Wheeler Centre – because, if it's a centre for Books, Writing and Ideas, the ideas are just as important as anything else.

Tony Wheeler is co-founder, with Maureen Wheeler, of Lonely Planet

Travel essentials: Melbourne

* The Wheeler Centre at 176 Little Lonsdale Street, Melbourne (00 61 3 9094 7800; wheelercentre.com ) launches today with 'A Gala Night of Storytelling' featuring 15 Australian writers, comedians and musicians. To reach Melbourne, only Qantas has direct flights from the UK (daily from Heathrow), but one-stop connections are available on many other airlines including Cathay Pacific, Emirates, Etihad, Malaysia Airlines, Qatar Airways, Singapore Airlines and Thai Airways.