That most iconic of nightclubs, the Hacienda, has its 25th anniversary celebrated by the Urbis exhibition centre, in Manchester, from Thursday. The club, now knocked down and replaced by luxury flats, was the focal point of the Manchester scene, garnering an international reputation as the first of the “superclubs”. Its design, by Ben Kelly, changed the way both clubs and the whole city looked – the sheer cheek of building something so modern and big there, in 1982, was the inspirational spark that reshaped Manchester. On the one hand, it was a folly, a total pretension; on the other, it hosted such fantastic events that it became embedded in youth culture and, latterly, a byword for the “Madchester” explosion of the late 1980s.

Jon Savage, the cultural commentator and author, lived in Manchester at the time. “Clubs, by their very nature, are transient,” he says. “They flower and they disappear. The Hacienda lasted longer than most. And, as a story, it’s got everything. There’s celebrity, design, scandal, larger-than-life personalities and drugs.”

The initial idea for the Hacienda came from Rob Gretton, the brusque manager of New Order and Factory Records boss. Thinking that the label needed its own club, he decided to build one – and, with its typical no-holds-barred approach, Factory decided to build a huge one. “There was nowhere for the sub-culture that grew up with punk and postpunk to go to,” Savage recalls. “The most extraordinary thing was to have this purpose-built club. It was a grandiose thing to do.”

Peter Saville, who designed Factory’s singular artwork, explains how the label and club intertwined. “The Hacienda was a kind of three-dimensional manifestation of Factory,” he says. “Architecture and spatial design can envelop you, and the Hacienda was a brilliant realisation of our end-of-the-20th century romance of who we were then – coming out of the industrial cities of the north of England.”

Working to a perfunctory brief – “big bar, small bar, food, stage, dancefloor, balcony, cocktail bar in the basement” – Kelly was given unlimited freedom to convert the former yachting showroom into a true people’s palace. It was a club that came with numerous theories – most of them issuing from the mouth of Tony Wilson, Manchesters most tireless cheerleader. The name came from a slogan of the radical group Situationist International, “The Hacienda Must Be Built”, found in Ivan Chtcheglov’s Formulary for a New Urbanism. Many of the key players in Manchester’s recent musical and cultural history – DJs, writers, journalists, musicians – paid their dues at the Hacienda, which became central to the city’s rise to prominence within British rock, dance and pop.

The Hacienda opened on May 21, 1982, in a blaze of glory that saw a packed club and an appearance by Bernard Manning – a very northern situationist prank, that. Its first couple of years witnessed Madonna’s UK club debut and brilliant gigs by the Birthday Party and Einstürzende Neubauten. On an average night, though, it could be quite empty – and at risk of becoming a bit of a white elephant. Paul Cons, the Hacienda’s main promoter and the man generally credited with turning round its fortunes, recalls: “For the first three years, it was very hit and miss. I came up with the idea of the Temperance night, with Dave Haslam, and that was a big success. Before that, the Hacienda had been trying too hard to be cool.”

Savage thinks the club’s eventual success was a process of evolution: “It took a long time to find the appropriate music. It was a boomy place, and rock music sounded crap in there. Early house, like the Chicago stuff, which was minimal, psychedelic and spacey, turned out to suit the acoustics.”

Wilson agrees: “What made the Hacienda so special was the insane acoustics. I remember complaining about them on the opening night, but, five years later, when it all exploded, I realised that the nature of the building, and its high roof, made it feel like a gothic cathedral, allowing hymns to be sent to the gods.”

So the Hacienda slowly morphed into a superclub, with famous nights such as Mike Pickering and Graeme Park’s Nude in 1987, and then Hot, hosted by Pickering and Jon Da Silva, in 1988. The new generation of ravers that poured through its doors caused this sea change. Before the rave era, audiences were fuelled by bottled beer; now there was a new vibe in the air. Drug-dealers skulked around in the dark corners of the club, dealing Es. The layout of several small rooms and alcoves helped that atmosphere. When Happy Mondays started to do their freaky dancing, everyone knew was something was up. Where did they get this strange energy?

With the newly happy Hacienda as the epi-centre of happening Manchester, Wilson was in his element. For Savage, however, this state of affairs was not without its dangers. “I was concerned about having the Hacienda and Happy Mondays promoted as a good experience. I had arguments with Tony. I thought they were creating a rod for their own back, with the drugs.”

The Hacienda was certainly hosting the most intense party in the country. Rave culture was everywhere, but its highest shrine was the Hacienda. The previously vast, cold space had become a sweaty, euphoric party. Entering the club, you felt the wave of energy and ecstasy.

Haslam, who DJed at the Hacienda more than 500 times, remembers the feeling. “Thousands of people saw it as their special space,” he says. “It’s culturally significant for so many reasons, yet it all evolved in an unforced and instinctive way. For example, there was never, ever a meeting about what music the DJs should play – we just got on with it and did what we felt was right. Since then, I’ve become aware of how much cultural activity isn’t like that, because it’s all marketing theories and focus groups and corporate sponsors. So, for me, the Hacienda was an amazing creative space that nobody controlled. The haphazardness was probably its downfall, though – eventually, the real world took its revenge.”

The party, of course, had to end. The drug situation was spiralling out of control. What had started as a bagful of Es, smuggled into the club by local musicians, had now become big business. There were ugly scenes as local gangsters jostled for their market share. Then, in 1989, a 16-year-old from Cannock, Clare Leighton, died outside the club. A brutal wake-up call, it was the first of a series of problems from which the Hacienda never recovered.

Madchester approached the mid1990s with a hangover. Even the huge success of Oasis, in 1994, seemed to belong to a different period of pop history. The Hacienda limped on, with occasional successes such as Paul Cons’s gay night, Flesh, but the vibe had gone. Finally, the party was over, and in 1997 the club shut – with insurmountable debts.

The Hacienda had stumbled to its demise, but its legacy lingers on. It is so much part of the fabric of Manchester culture that people still get misty-eyed about it. “Being closed and demolished has helped its reputation,” Haslam says. “It’s like James Dean dying young. He’s always going to be legendary, and so is the Hacienda. If it was open now, as some nostalgic Madchester theme park, or some club like every other club, would anyone be interested?”

Few nightclubs had the Hacienda’s range of appeal. Some people talk about it in terms of situationism; others reminisce about wild nights on ecstasy; some complain that rave ruined the club, and fondly remember those chilly evenings watching bands in the early 1980s; others get excited about Kelly’s revolutionary design, pointing to its huge influence on the rebuilt city centre; others still laugh at the downstairs bar being named the Gay Traitor, with a huge photograph of Anthony Blunt hanging over the door. The Hacienda may have meant many different things to many different people, but it remains a cornerstone of Manchester’s cultural history.

Hacienda 25 at Urbis, Manchester, from Thursday until February 17

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