The first Glastonbury Festival was little more than 1,000 hippies standing in a Somerset field one afternoon in 1970. Having paid just £1 to be there, they were quaffing free milk from the farm when the fledgeling folk-rock star Al Stewart leapt unannounced on to the stage to write his place in British music history.

“Glastonbury has gone from being like a garden fête to being Woodstock,” said Stewart, strolling through Kensington Gardens between shows on a rare return to Britain. “I played at the first festival on the day Jimi Hendrix died. The news cast a downer on the whole day, but we still had to play.”

Stewart was then angling to be Britain’s first folk-rock superstar. America had had Bob Dylan, and Stewart was at the cutting edge of the legendary British folk revival, emerging from the clubs and cellars of London’s flourishing underground scene.

His 1976 album Year of the Cat was a hit in America and much of the rest of the world, but Stewart struggled to replicate this success in his native Britain.

“Before Year of the Cat I had made two albums I liked and four albums I really didn’t like,” he explained. “I made my break-up album Orange and I thought it was pretty awful. I was very depressed at the time. Things could have taken off then if it weren’t for that.”

A tumultuous relationship with his girlfriend, Mandi, coincided with a dark era in Stewart’s early songwriting, of haunting tracks and frank, full-frontal love songs — one of which was the first mainstream release to contain the word “f***ing”. “There was no other way to say what I was trying to say. The line goes: ‘It grew to be less like f***ing, and more like making love’.

“To me, the turning point was telling myself that no one wanted to hear my love songs any more. I had a great interest in history and also in folk-rock, and wondered what would happen if you put the two together. It sounded like the least commercial thing I had ever heard in my life, but it was quite exciting and I thought: ‘Damn, this is good’.”

The result, in 1973, was Past, Present & Future, a whole new genre of historical-folk-rock that broke America and spun tales of Russian soldiers on the eastern front and the prophecies of Nostradamus.

“No one else was doing it, and no one is today. The best thing about writing a song about Lord Grenville is that Justin Timberlake isn’t going to steal it!”

If the name Al Stewart seems unfamiliar, the songs will not. Tracks such as Year of the Cat and On the Border went on to cement Stewart’s place among the pop hit-makers of the late 1970s. Stewart said: “When I finished Year of the Cat, I thought: ‘If this isn’t a hit, then I can’t make a hit.’ We finally got the formula exactly right.”

Back in 1967, a young Yoko Ono persuaded Stewart to part with the only £100 he had in the world to put towards her art project — a film of 360 naked bottoms.

“Yoko was always very persuasive and incredibly exotic,” Stewart said. “A couple of years later, after she had met a rather more famous guitarist than me, I wrote to Apple to ask if I could have my money back and received a cheque for £100, signed by John Lennon. I was tempted not to cash it, but I frankly needed the groceries back then.”

The groceries were soon paid for by a number of minor and then major hits in the mid-Seventies, but Stewart left for America just before his popularity hit its peak. While he became, and still remains, the darling of the American circuit, his British following was mainly limited to his cult fans from the era of his classic gigs in the folk clubs of Soho.

Thirty years later he is back in London to show the British public what they have been missing. “There’s a spring in the step of London at the moment,” he said. “The whole scene feels very Sixties-ish again. The intelligence of the writing out there is awesome, like with Laura Marling and Elbow’s last album. They don’t do clichéd lyrics. If you are trying to convey an emotion that some producer thinks a 15-year-old might have, then it doesn’t ring true.”

Stewart, now 63, has timed his prodigal return perfectly. This year’s Glastonbury line-up is embracing classic acts such as Neil Young and Bruce Springsteen; comebacks and reunions litter the music headlines, and folk singers are back in vogue.

It is as a folk singer that Stewart feels most comfortable. It was after his million-selling pop hits in the Seventies that he had to come to terms with the fact that he was not a rock star. “It reached the point where the kids in the front row weren’t buying me as a rock n’roll frontman,” he explains. “But they would have liked me with an acoustic guitar.”

The relative failure of Year of the Cat in Britain, where it reached only No 31, has paradoxically worked out for the best. “I kind of love it because I’m still a folk singer in England, instead of a marginalised Seventies pop star, which I’m sure I am in Hong Kong.”

Since the Nineties, Stewart has returned to his inimitable brand of deftly told historical tales, and has since produced some of his most critically acclaimed material, not least his latest album Sparks of Ancient Light.

The shaggy hair and flared jeans have been replaced by a short grey crop and sensible suit, but Stewart still commands the stage with a marionette-like energy and unmistakeable, crisp voice. “There have been a lot of comebacks this year, but many of my contemporaries have never stopped. We do it for the art, like a vocation. And we have mortgages to pay like anyone else.”

Al Stewart plays Birmingham Town Hall, tonight; Grand Opera House, York, Fri; Queen’s Hall, Edinburgh, Sun; and the Sage, Gateshead, May 18

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