CENSORSHIP IS ON THE RISE IN BRITAIN. Film companies make the cuts the BBFC asks for before the films are distributed. Comics importers like Knockabout steer clear of contentious titles. AK Press, the anarchist publishers and importers were set to fight in court over the seizure of the ifakus American shock-zine Answer Me, but backed down when they found out that customs decisions are virtually impossible to challenge in a court of law. Which leaves us with only one combatant currently left in the ring: the independent publishers Savoy.

Savoy is a Manchester-based company that has spent fifteen years publishing an eclectic mixture of books, comics and records. Most notably, there is Lord Horror, the first novel to be banned in Britain for more than twenty years. Lord Horror is a kind of deliberately scatological, very William Burroughsian fable, the story of Hitler and his allies living on in an alternative Britain. Colin Wilson said that 'as an exercise in Surrealism it compares with some of the best work that came out of France and Germany between the wars', and the British sci-fi writer Michael Moorcock was a key witness at Savoy's appeal against the ban.

"I liked Lord Horror a lot," he confirmed, when I called him up at his current home outside Austin, Texas. "I've already been to the court to defend it. I think it's telling the truth in it's own horrible way, and that's what I like about it. Compared with other satire it has a more powerful and directed anger. It takes everything beyond the limits."

Taking everything beyond the limits, however, clearly doesn't appeal to the Manchester Police force. For though the appeal succeeded in having the ban lifted on the novel itself, Savoy are currently back in court to defend a series of Lord Horror comics—spin-offs from the book—which have once again been seized by the police and charged with obscenity. I headed up to Manchester for the latest courtroom drama in this libertarian guerrilla war.

Manchester Magistrates' Court is pretty typical of such establishments around the country, newer and cleaner than most, but still full of the usual collection of teenage herberts in dodgy sportswear talking to their hapless solicitors, while their mums and girlfriends and babies wait in the canteen. In the courtrooms themselves, there's the regular parade of hookers and burglars, dope dealers and drunk drivers.

It's scarcely dramatic: magistrates' courts are mostly packed with petty criminals who've been nicked fair and square while going about their unlawful business. As a rule there's no argument about guilt, just tired deliberations as to how high the fine or how long the sentence should be.

Up in Court Seventeen, though, something strange is going on. Something more out of Kafka than The Bill. In an almost empty courtroom, with no media or spectators, a lone magistrate is presiding over an obscenity trial, and no one's paying a blind bit of attention. Apart from the magistrate, Jane Hayward, there's her clerk, a police lawyer and a policeman for the prosecution, a barrister and a solicitor for the defence. Plus a defendant and a defence witness. There's not a single media person, or spectator of any kind apart from myself.

The defendant is Mike Butterworth, from Manchester-based publishers Savoy. He's easy enough to spot—"I'm the six-foot-four skinhead in a suit," he told me over the phone—and so he is. Sitting next to him, in a dark suit and tieless black shirt buttoned up to the neck, looking like he ought to be in some dodgy New Order type synthesiser combo, is the defence witness, John Coulthart. He's the artist responsible for the key item on trial here today, an adult comic called Lord Horror: Hard Core Horror No 5.

The culmination of a series depicting, like the novel, a parallel universe version of World War II, Hard Core Horror No 5 attempts to take on nothing less than the Holocaust. To this end Coulthart has produced a series of dark, vaguely H R Giger-esque tableaux of Auschwitz, rendered as a decayed death factory. The pictures have spaces for captions, but they have been left blank. Words, the artist seems to say, are not enough. Nor, in the end, is art: the last pages of the comic are simply photographs of some of the camp's dead victims. The effect is certainly upsetting. But obscene? Only to the extent that the Holocaust was obscene. Which is why Savoy has been able to attract top civil liberties lawyers to its case.

Two of them are in court today. The solicitor is Louis Charalambous from Stephens Innocent, and the barrister is Frank Panford, a tintack-sharp emissary from Geoffrey Robertson's Doughty Street Chambers. The fact that Frank is also black pleases Butterworth in as much as it's a handy pointer to the fact that whatever else the Savoy crew are, they are not racists.

The day in court seeps by in a sludge of arcane legal wrangling. Panford is arguing that Savoy should have been allowed a jury trial, which is supposed to be available to any work of serious intent. The magistrate-only court proceeding, says Panford, is for dealing with straightforward pornography. When the court adjourns in mid afternoon to allow the magistrate to consider this argument, myself, Butterworth and Coulthart head back to Butterworth's flat, a remarkable eyrie set in a Ballardian housing estate perched bizarrely on top of the Arndale shopping centre. There the two of them fill me in on the background to this trial, which is only the latest in a long legal battle between Savoy and the Manchester police.

It's a strange story and a very English one. It starts thirty years ago, at the dawn of the underground culture, with two sci-fi fans from Manchester: a rock'n'roll obsessive with a bouffant quiff and perpetual dark glasses named Dave Britton, and a crophead lifelong vegan, Mike Butterworth.

"Back in the Sixties," Butterworth told me, "I was living on Ladbroke Grove and writing for New Worlds magazine. Then in the early Seventies, with a family to support, I moved back to Manchester and went into advertising. After that I was a freelance writer and novelist for a while. I edited New Vegetarian magazine and wrote sci-fi fantasy. At the same time Dave was running a bookshop, The House on the Borderland. We were both publishing small press fiction, fantasy and art magazines, and with my contacts and his money decided to get together to do something on a larger scale."

Britton's shop was typical of the times, modelled on the legendary Soho hippie bookstore Dark They Were and Golden Eyed, where be-kaftaned Tolkien heads could pick up sci-fi and fantasy from Philip K Dick to Michael Moorcock, mind-expanding fiction from William Burroughs to Carlos Castaneda, American comics from the Silver Surfer to Fat Freddie, as well as drug 'zines like High Times and Homegrown. One difference—and an important one in years to come—was that Manchester didn't have quite the number of eager punters as London and after a loss-making start Britton consistently sold a certain amount of soft-core porn through the shop and its successors (by the late seventies Britton and Butterworth had built up a chain of eight bookshops across the North).

Britton and Butterworth's joint publishing venture was to be called Savoy. "The name was inspired by the fin-de-siècle magazine of the same name, that Aubrey Beardsley drew for," says Butterworth, and for my further education John Coulthart removes from his briefcase an original, 1890s', copy of the magazine, that he'd taken to court as a good luck totem. Butterworth continues, "We were mainly interested in getting neglected artists and writers back into print—lowlife writer Jack Trevor Story, pop wünderkind Nik Cohn, historical writer Henry Treece. All kinds of stuff. We did a Mike Harding book... Harlan Ellison, Michael Moorcock. A couple of erotic sci-fi titles—Charles Platt's The Gas, Samuel Delany's The Tides of Lust."

Not least of their achievements was to publish work from one of their shop managers, one M John Harrison, a writer now regarded by many as perhaps the greatest single talent to emerge from the British sci-fi scene. And by the start of 1980, contracts were being signed with the likes of William Burroughs, Gerald Scarfe and the great black American surrealist Ishmael Reed.

But 1980 turned out to be a watershed year for Savoy for all the wrong reasons. Four years previously Manchester had appointed James Anderton as their new Chief constable. Anderton, with his Old Testament beard, and forthright belief that he was put in his job to carry our God's work, achieved national notoriety in the late Eighties with his comments on AIDS—to the effect that homosexuals were swirling about in a cesspool of their own making.

His first action on taking over Manchester police was to declare war on the permissive society. In practice this tended to mean a war on porn. Coulthart recalls that: "He was raiding virtually every newsagents in Manchester for anything vaguely erotic. Little roadside newsstands were being busted. He even did Tescos for selling a Sun Page Three girls collection".

By 1980 this was a war that was also raging in London. Throughout the Seventies, entrepreneurs like David Sullivan had been steadily pushing at the boundaries of what could be depicted in a top-shelf magazine, and their cohorts had been filling Soho with tacky sex shops. Thatcher's election was the signal for a fightback. Westminster Council closed down almost all of Soho's sex shops and the Obscene Publications Squad went after the porn barons with renewed enthusiasm, culminating in the jailing of David Sullivan in 1982.

Anderton was keen to follow suit; only trouble was Manchester didn't have much in the way of porn barons. What they did have, though, was a couple of oddballs who had a chain of bookshops that sold a certain amount of soft-core porn, and also ran a publishing house which published a couple of erotic—scarcely pornographic—sci-fi titles: "Because we were producing books that they didn't really understand," says Butterworth, "they persuaded themselves that we were producing pornography on a huge scale."

And so the raids started. By the end of 1980, the Manchester Vice Squad had made over forty raids on the Savoy shops, carting off stacks of soft-core magazines, horror magazines, comics and novels, including The Tides of Lust and The Gas. But far from making the Savoy team contrite, the raids simply enraged them, and they responded to the perceived as harassment by publishing Jack Trevor Story's Screwrape Lettuce, a gleefully pornographic and scabrously anti-police fantasy.

So in November 1980, by now well into hillbilly feud mode, the Vice Squad made their biggest raid yet. Both Savoy's Manchester shops were raided, Screwrape Lettuce was seized along with thousands of pounds worth of assorted magazines, comics and novels. And this time, charges were brought not just under Section Three of the Obscene Publications Act (which doesn't involve criminal charges and is generally used simply to allow the police to destroy seized pornography), but under Section Two (designed to prosecute the pornographers themselves), which carries the possibility of imprisonment.

Bafflingly, the titles named in this Section Two prosecution were not porno magazines or either of the erotic Savoy publications but a selection of American novels published in the States in the early seventies, and staple fare in remainder bookshops all over Britain. And if the charges weren't bad enough, the scale of the raids delivered such a financial body blow that in February 1981, Savoy Publishing went bankrupt. Britton and Butterworth retrenched for a while. "We went into a period of hibernation, packaging books for other publishers—we did a series of rock books—AC/DC, Ted Nugent, Led Zeppelin—we even did a Bernard Manning joke book."

Finally, in May 1982, the case came to trial. Their barrister stepped down the day before the trial, leaving the case in the hands of a substitute who knew nothing about it. The books were indeed found obscene, and David Britton was sentenced to twenty eight days in prison. And not just any prison: Britton found himself lobbed into Strangeways just as a long hot summer of prison rioting was chiming up.

The experience of sitting in a cell while his neighbours were busy setting their own cells on fire was one that, not surprisingly, affected Britton deeply. But rather than resolving to be a good boy and never bother Anderton's vice squad again, he began work on the multimedia extravaganza that has kept Savoy knee-deep in legal battles since—Lord Horror.

"After Dave's prison experience," says Butterworth, "his dark view of humanity got even worse... I had been facinated by the Third Reich—trying to get at the core of how it happened. I'd started a novel about Hitler in an alternative universe—but then Dave came up with the more original idea of using Lord Haw-Haw ('Lord Haw-Haw' was the nickname given to William Joyce, an Irish nazi who made weekly propaganda broadcasts to Britain from Germany during World WarII, and who was hanged as a traitor after the war) as the central character, renaming him Lord Horror—which seemed to me to be much better." With Butterworth's blessing, Britton took over the novel.

Lord Horror, then, was Britton's embodiment of the glamour and horror of fascism, and it is the unflinching exploration of that ambivalence that made Horror such a controversial creation. It is clear enough to a careful reader that Britton's intentions are anti-fascist (after all, the novel was inspired by what he saw as fascist-type persecution), and one of Lord Horror's acolytes is a certain 'James Appleton'—transparently James Anderton. But rather than simply portraying Horror as a monster, Britton has taken the riskier option of making him seductive: the monster we deserve. In the twisted iconography of Britton's fantasy world, Horror emerges as a kind of Rock'n'Roll Goebbels.

It's not a new idea, the notion of the rock star as fascist demagogue, but it's never been executed with quite such savagery or thoroughness of Savoy, with their steady stream of Lord Horror product—not just the novel but also several records and three different comics. The records in fact came first: Lord Horror's first public outing was on a 1986 single, a deconstructive cover version of New Order's Blue Monday and featuring a singer who sounded suspiciously like lost rock legend PJ Proby.

Which was exactly who it was. Savoy had found their very own real life Lord Horror living on a Manchester pub floor. For while Lord Horror the novel germinated, Butterworth and Britton had been looking for another project, and came up with the idea of writing a biography of their favourite crazed pop demon, PJ Proby.

"Dave and I have never been that close socially," remembers Butterworth, "but we've always had certain obsessions in common: like Ken Reid's artwork or The Cramps or PJ Proby. We found out where Proby was living. He was doing the working men's club circuit at the time. We had to pay a hundred pounds to visit him that first time; that was the only way he'd see us. But from that point on we went everywhere with him. We got miles of tape for the biography but it became clear to us that we he needed most was a record deal."

No major record company was interested in taking on a ten time loser like Proby, so Butterworth and Britton—despite not playing any instruments and knowing nothing about the music business—decided to make the records themselves and start their own record company to release them. "We'd always admired the way he subverted anthemic songs with his vocal style, so we decided to let him loose on some contemporary sacred cows—Love Will Tear us Apart, Anarchy in the UK, Bowie's Heroes.

"Part of Proby hated what we did, he's like a conservative rebel, there's another wild side of him that we tapped into for the records. In the end we produced him for this whole phase of his life, what we thought at the time was a terminal alcoholic phase. He'd eloped with this underage girl, Alison, and was being pursued by the police and her angry parents, and now she'd left him. He had this gun in the studio and was going to shoot Alison and then himself. He really meant it at the time. Certainly scared us, and that's why Heroes sounds so freaky and weird."

And so life and art were entangled—Proby was a crazed, violent, racist drunk, touched by greatness. Who better to play Lord Horror, a crazed, violent, rascist embodiment of our worst nightmares, yet touched with awful charisma. So Proby recorded as Lord Horror and the spirit of Horror would in turn inform Proby's own recordings.

Almost everybody in the industry hated these records, the indies wouldn't touch them with a bargepole. Not that Savoy helped their own cause much by pulling such witlessly provocative stunts as crediting the backing band as the Savoy Hitler Youth Band. The Savoy team however take a perverse pride in reproducing such negative testimonials as this billet doux from then rock critic Richard Williams: 'I don't know who you are or what you want, but please don't send me any more of this trash'.

Still, the music world is used to being shocked, almost expects it, so it wasn't until Britton and Butterworth made a return to publishing that they really managed to provoke a rise. The summer of 1989 saw a Lord Horror offensive, with both the publication of the much-delayed novel and the launch of the Lord Horror comics: the ultra-noir Hard Core Horror series and the deliberately offensive, satirical spin-off Meng & Ecker.

Controversy was immediate. "One week after the novel was published the police were desperate to get hold of it. There's the character called James Appleton, who's obviously meant to be a caricature of Anderton," says Butterworth. "We took Anderton's speech about gays swirling about in a cesspool of their own making and reprinted it using 'Jews' instead of 'gays'. And he didn't like that at all. The police kept raiding us for the books, then they raided us for the comics. Each time we put out a book or comic they'd raid the shops as a kind of tit for tat."

It took nearly two years before the police put a case together against the Lord Horror material. After all, making a mock of a Chief Constable is still not a criminal offence. Eventually they hit on the idea of prosecuting both the novel and the comic Meng & Ecker under the Obscene Publications Act, on the unusual grounds of anti-Semitism (unusual because it's normally the province of the Race Relations Act).

The case came to court on August 18, 1991. Savoy were denied the right to a jury trial and the case was heard by the same magistrate who had signed the police warrants, Derrick Fairclough. Fairclough duly found both novel and comic obscene—making Lord Horror the first novel to be banned in Britain for over twenty years.

Three days later, buoyed by the verdict, the police were back at Savoy. This time they seized over 4,000 copies of the Lord Horror and Meng & Ecker comics, and assorted soft-core pornography. "Dave was sent down again in April 1992, we'd been raided for a lot of the comics, and at the same time other stuff was taken from the shops. And Dave was sent down for that—softcore porn, gay magazines, tattoo and body piercing magazines. He ended up spending two more months in prison."

At this low point, however, things began to look up. While Britton was inside, Butterworth managed to get civil liberties group Article 19 interested in Savoy's plight, and an appeal against the banning of Lord Horror was launched. Geoffrey Robertson QC, who had defended Oz in the early Seventies, agreed to take the case, and on July 30, 1992, the case was heard and the novel was cleared.

Meng & Ecker, however, was still held to be obscene, "because it was luridly bound and therefore [more] likely [than the novel] to attract attention from the less literate," said the judge. Butterworth noted patronising echoes of the Lady Chatterley prosecutor's celebrated question to the jury: "Would you let your wives or servants read this?"

A partial victory for Savoy, then, but one that still left outstanding the matter of 4,000 comics seized after the original verdict, including Hard Core Horror No 5. The CPS decided to go ahead and prosecute once more. And that is where this story started.

By now it is evening at the Butterworth's, his son, Damon, drops round with some issues of the latest comic series, Reverbstorm, perhaps the most intriguing and fully realised Savoy product to date, and then the three of us head across town to meet the lawyers for dinner at the Metz, a designer Russian restaurant set in a Victorian canalside warehouse.

That evening there's a certain optimism that things may go their way in court, that the principle that any publisher who wishes to defend their work from obscenity charges must be allowed a jury trial will be upheld. So next morning I accompany Butterworth to court, stopping on the way to visit the impressively Dickensian Savoy offices.

And it takes hardly any time at all for the magistrate to decide that the CPS were quite allowed to deny a jury trial without formal explanation. She then proceeds to listen to the case for the defence of the comics themselves, Mike Butterworth explaining the history and context, John Coulthart explaining the art tradition, and media expert Guy Cumberbatch testifying to the unlikliness of the material inspiring anyone to go out and start their own Third Reich.

Once again, though, it takes the magistrate very little time to reach her verdict, to whit: 'In my judgement, the publications complained of have no literary, artistic, educational or intellectual merit save as an illustration of a curious form of depravity and titillation... I find without hesitation that when taken as a whole all the publications are obscene within the statutory def-inition... Further, I am in no doubt that a significant proportion of the likely readership would be depraved or corrupted by the consequences. Indeed, I dread the consequences for some of the readers.'

And that's it. That's how it works in Britain. A magistrate makes a subjective assessment of ten years of work and decides that no one else should be allowed to see it. Thank you and good night.

Savoy's solicitor, Louis Charalambous, however, is philosophical about the result. "It didn't come as a surprise," he tells me. "The magistrate didn't seem to understand what the defence was." Immediately the appeals are going in. Firstly to query the magistrate's decision that Savoy were not entitled to a jury trial, secondly on the matter of the obscenity itself. This one will undoubtedly run and run.

For Savoy have no intention of giving up until the Manchester police—and by extension all the other arbitrarily appointed censors out there—are prepared to accept that, as John Coulthart puts it: "People who are adults should be treated like adults." •