There’s no mistaking the anxiety in Yusuf Islam’s body language. Once the man formerly known as Cat Stevens has exchanged brisk, polite greetings, he paces over to a table where his manager is seated. The task of choosing a new publicity photo from a laptop seems to take a small eternity. But this, you suspect, isn’t the primary source of anxiety. In five hours a plane will take him to South Africa, where he will record his parts for a forthcoming children’s album. In five days, Brent Council will tell him whether his application to build an Islamic cultural centre on the grounds of an old church has been successful.

The timing is ironic. While, in other parts of the UK, Islamic jihadists have been linked with attempts to blow up buildings, the moderate Yusuf Islam’s attempts to erect one have been met with local protest. Contrary to reports that he wants to build a 22-storey “tower of peace”, the £4.5 million Maqam Community Building is “a cultural centre centred around the Islamic faith but accessible to all”, including a gym, crèche, café and exhibition space. Its architect, Robert O’Hara, says it’s designed to “get rid of the awful image that Islam has had put upon it”.

So is this a rebranding of Yusuf Islam, the former troubadour who famously appeared to support the fatwa on Salman Rushdie, or a typically altruistic initiative from one of the Western world’s most high-profile Muslim philanthropists? It’s a tension of which Yusuf himself is painfully aware. On last year’s come-back album An Other Cup he was billed plainly as Yusuf. No need to hold a focus group to determine why that might be. Still, it’s a battle he appears to be winning. When he closes his short set at the Hamburg leg of Live Earth with Peace Train, he’ll be playing before his biggest audience in 28 years. “I felt I’ve written sufficient songs about this subject to commit to it and make a stand,” he says.

Dressed in jeans and a T-shirt, the 58-year-old singer looks trim and healthy. His accent, rich in London colloquialisms and glottal stops, is somehow surprising. Given that Yusuf has spent almost all his life in London, it shouldn’t be. But then, after more than three decades spent in the sanctuary of a new identity, it’s only natural to think that Yusuf Islam is a completely different person from Cat Stevens. Wasn’t that the intention when, in 1980, he followed his conversion to Islam by auctioning his guitars for charity?

So why come back now? In truth, the tunes never dried up. Even a few months into his new life as Yusuf Islam, the singer celebrated the birth of his son by recording a song A Is for Allah. He had renounced his guitar, but this unaccompanied paean to his new child topped the charts in Turkey. Soon though, even the Islamic nursery rhymes ceased. Yusuf Islam had four more children. His public appearances were mostly restricted to talks in which he explained to other London Muslims the reasons why his old life had left him unfulfilled.

With the benefit of hindsight, several Cat Stevens songs seem to signpost his future path. On Into White, his desire to declutter his interior world sounds like a prayer of desperation. To anyone who knew a little about the childhood of the singer born Steven Georgiou, Where Do the Children Play? didn’t require too much analysis. His Greek-Cypriot father and Swedish mother ran a café on the busy West End junction of New Oxford Street and Shaftesbury Avenue. “I was there every night of my life. Where did I hang around? Well, one of the little escapades I used to take part in was climbing roofs. It was pretty dangerous, and one time I nearly fell, but it wasn’t something you would dwell upon.”

He was still living with his parents when he first tasted fame. Interviewed in 1967 about his feudal pop parable Matthew & Son, Stevens pondered: “When I try to sit down and work out what I am, it worries me because I don’t know.” When he returned in earnest with Tea for the Tillerman, in 1970, after a year laid low with tuberculosis, he had found a sound that better mirrored his internal anxieties. These days back-packing buskers still rattle out Wild World or Father and Son to a light rain of loose change.

Stevens found that the choices opened up by success didn’t necessarily make him any happier. Fame had merely complicated matters. “I’ve gone too far to have an ordinary life and ordinary relationships,” he told one interviewer in 1975. “I can’t see myself ever settling down properly, unless something incredible happens.” Reminded of the utterance, Yusuf lets forth an amused nod. That was also the year he shaved off his hair and beard and decamped to Brazil, Ethiopia and Malibu for an extended sabbatical. “I knew how many sins I was accumulating. There was a sense of waiting for an epiphany or something.”

Talking about the moment that saved him, Yusuf is clearly describing what he regards as a physical act of divine intervention. “I was in serious trouble [swimming] in the Pacific Ocean in Malibu, and I had lost all power to swim. Suddenly I called out for God’s help. And then a wave came and helped me get back to the shore.”

As his children grew up, was it a source of intrigue that their father used to be a pop star? Or did he try and withhold that information? “There was no question of doing that,” he smiles between long, measured sips of tea, “They had been in the audience at enough of my lectures to be fully aware of what I had done.” They were also in the audience in March, at the singer’s first UK show in 28 years, filmed for a new DVD entitled Yusuf’s Café. Now that his role in Father and Son had switched, how strange must it have been for Yusuf to find himself singing lines such as “Look at me/I am old but I’m happy”?

The last time Yusuf performed the song was in 1979 at the Unicef Year of the Child Concert at Wembley. “My wife was expecting, but we hadn’t told anybody. And when I sing it now, I sing it from the point of view of someone who still has a lot to learn from his children.”

Now his son Mohammed, 27, is a singer who records under the name Yoriyos. Watching his son play the instrument that he renounced at the height of his fame has allowed Yusuf Islam to be more accepting of his younger self. “Mohammed is like me when I was young, and yet he’s assertive of his own identity – which is exactly what I was like. So he helped me to see myself with younger eyes. Also, [the guitar] had not been accepted by a conservative school of thought [within Islam]. But, on analysis, I discovered it wasn’t so long ago that Islamic culture thrived in Europe. Then, you get to find out that – guess what? – the guitar was introduced to Europe through Islamic Spain.”

Because he refuses to talk about the quotes attributed to him during the Salman Rushdie furore, it’s impossible to discover whether his views on that fatwa have moderated. Rushdie, writing to The Sunday Telegraph in response to an article that played down Yusuf’s part in the controversy, quoted from The New York Times in which Yusuf apparently said that burning “the real thing” would be preferable to burning effigies of the writer. Signing off, the author then added: “Let’s have no more rubbish about how ‘green’ and ‘innocent’ this man was.”

But whatever Yusuf might have once rashly condoned in the name of Islam, the terrorist atrocities of recent years appear to have clarified his outlook. After 9/11 he flew to New York and sang Peace Train at the benefit concert for families of the firefighters who lost their lives in the attacks. Even before 9/11, he was part of a mission to deliver $33,000 to refugees on the Kosovan border.

Though the wider world has gradually warmed to Yusuf’s peaceful overtures, US security forces have been more cautious. Three years ago a United Airlines flight on which Yusuf and his 19-year-old daughter were travelling was diverted after the discovery of his name on a nofly list. The singer suspected nothing until the plane landed in Maine – “and six or seven tall, uniformed FBI agents walked on board. My daughter and I were separated through the whole ordeal”.

When the time came to make a new album, one of the first songs he recorded for it was a cover of Don’t Let Me Be Misunderstood. If the song is a response to what he sees as his typecasting, the decision to step back into music is fuelled by the same impulse. “As long as you’re singing,” he says, “there are no interfering bodies trying to corrupt what you’re doing.”

Calling his album An Other Cup was symbolic. “Tea and coffee are drinks that unite almost all people all over the world. Therefore, there’s a whole lot more we have to share from this cup of life, regardless of faith.”

Four days after our interview, Brent Council gave Yusuf the go-ahead to build his cultural centre.

Yusuf Islam plays the Hamburg leg of Live Earth tomorrow, www.liveearth.com. Yusuf’s Café Session DVD is on Polydor

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