Lou Reed describes his 1973 album Berlin as his masterpiece. “I think it is as good as it gets,” he says. Yet it wasn’t until 33 years later that he performed it live, a few months ago. He says he never had the impetus. Now, after successful shows in New York and Sydney, Reed is bringing his 35-piece ensemble to the UK.

He may consider the album a masterpiece but others have slammed it. So is all the fuss yet another act of yuppie nostalgia or is something else at work here?

As Reed describes it, Berlin is “rock with the eye of a novelist”. It’s a bruising song cycle about Caroline, a promiscuous, expatriate American woman caught up in an abusive relationship with a speed freak, Jim. The album was conceived more as a theatrical production than a conventional album. “We were very serious about trying to do a movie for the mind with music,” Reed says. “It was very hard to do. We weren’t doing things in a formulaic pop format. We were being very ambitious and I suppose that’s why the work can hold an interest for people today.”

Berlin was Reed’s third solo album and the follow-up to the commercially successful Transformer, which included glam-rock classics such as Perfect Day, Satellite of Love and Walk on the Wild Side. It was originally meant to be a typical collection of songs, but Bob Ezrin, the producer and arranger, who had previously worked with Alice Cooper, was excited by Reed’s storytelling ability and wanted to see if he could extend one story for the length of a whole album rather than just having a series of isolated little stories.

“I loved the song Berlin [from Reed’s first, self-titled album],” Ezrin says. “It alluded to something and I wanted to know more, so I said to Lou: ‘Let’s finish the story.’ He said: ‘Give me a month, I’ll be back.’ He came back and all the songs were written. His writing was so evocative – I could see, smell and feel the record. It reminded me of Brecht and Weill.

“It was the first time I was able to imagine the sound of something and then realise it. It was absolutely thrilling – the feeling was like a psychedelic drug. We came up with a concept and he went and wrote it – he made it real. In rock’n’roll it’s usually the other way around.”

Even though Berlin was dramatic and cinematic on record, the live show makes the details even more vivid. It is performed in front of projected videos, created by the artist-provocateur Julian Schnabel and his daughter Lola, offering brief glimpses of the imagined characters and little hints of narrative structure.

Reed and his cast of dozens remain largely faithful to the album arrangements but there are some added embellishments, courtesy of the producers Hal Willner and Ezrin (who appears on stage in a white lab coat). The Bed has a narcotically anaesthetised Jim revisiting Caroline’s suicide; live, the children’s choir gives Jim’s numb lyric “Oh, oh, oh, oh, oh, oh what a feeling” an entirely different resonance.

Berlin is an often difficult album that pulls no punches in chronicling the depths of human despair. On more than one occasion it has been dubbed the most depressing album yet made. But as unsettling as the album can be for listeners, it was far worse for the creators. While Reed claims that he has no memory of it at all, Ezrin has described making it as “going to Hell and back”.

“I was 22 or 23 at the time and I was suddenly playing in a very dense emotional jungle that I wasn’t used to,” he recalls. “I was with people with a lot of history. I didn’t know about decadence. I was a nice little kid from Toronto. I was having marriage difficulties; Lou was having difficulties, too. David Bowie was hanging around and he wasn’t the greatest influence at the time, plus he was very intimidating. The hellishness was from drugs.”

The album’s most notorious song is The Kids, which features an interlude in which small children are crying and screaming for their mother. The interlude is so harrowing that all sorts of apocryphal stories have emerged to explain how Ezrin coaxed the horrible sounds out of his own children. The truth, thankfully, is more mundane.

“My younger son hated more than anything to go to bed,” Ezrin says. “I brought home a mike to record our nighttime ritual of getting him to sleep. He would kick and scream, do anything not go to bed. My older son was 6 at the time and he had been in school plays already. I told him to pound on the door and shout, ‘Mommy, Mommy’. I took that performance and made it unbearable by compressing the heck out of it. I made it as grating as possible. It sounds like they’re inside your head.”

Given the environment in which it was created, Berlin in live performance must be an emotional rollercoaster for Reed. “I think this is very brave of him,” Ezrin says. “It’s a bit like saying: ‘I’m going to live with my ex-wife for a few months’.”

Reed, though, says that the three-decade interval has made it safe to revisit Berlin’s terrain. “I think it’s a great help to have a little distance because of the emotional convolutions involved,” Reed says. “The characters are constructs of real people, but enough time has gone by that I don’t even know what makes it up any more. I think I’m better that way.”

Lou Reed’s Berlin is at the Manchester Apollo on June 29 and the Hammersmith Apollo on June 30 and July 1 (0870 4000688). A version of this article appeared in The Times Sydney supplement

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