Apart from Sodom or Gomorrah, is there a city in human history with a worse reputation than Babylon?I can’t think of one. So deeply embedded in our assumptions is the squalor of Nebuchadnezzar’s capital, we can call a shoddy TV drama with lots of rumpy-pumpy in it Hotel Babylon, and everyone will know what to expect. It’s quite an achievement. The idea that Babylon was a sink of iniquity has penetrated to the deepest corners of the satellite schedules.

Babylon’s appalling reputation can be traced back to a single book.

And I don’t mean Kenneth Anger’s notorious Hollywood Babylon, with Jayne Mansfield’s breasts popping out terrifyingly on the cover. I mean the Bible. That it happens to be the most extensively read book in the world is what gives the Babylon fantasy its remarkable reach. The destruction of Jerusalem by the Babylonians; the taking into captivity of the Jews; those sad psalmist laments about sitting by the rivers of Babylon, the Tigris and the Euphrates, and remembering Zion, have entered our global consciousness on a primary, Boney M level. Which is why the Babylonian hatred has survived more or less intact into our own times.

Revelling in the crucial social role found for it by Neil MacGregor, the finest museum director we have, the British Museum has set out, once again, to illuminate the darkest corners of the present by shining a sharp light on the past. I visualise MacGregor perched in front of the telly, watching more bombs going off on the news and thinking: what do we know about that place? He’s done Darfur. He’s done Iran. It’s Iraq’s turn.

Ancient Babylonia stretched from modern Baghdad to the current borders of Basra. To the north lay Assyria. To the south, Arabia. Egypt was the region’s other super-power. And when the great Babylonian ruler Nebuchadnezzar ordered his warriors into the tiny rebellious kingdom of Judah, where they destroyed the temple and took the nation into assimilative captivity, he was following the typical patterns of Middle Eastern bellicosity. Subjugating Judah was a way of ensuring stability on Babylonia’s western flank. Egypt was the real enemy. The fact that this barely significant Middle Eastern skirmish grew into one of the defining events of our civilisation - still bearing terrible fruit today - is, perversely, a tribute to the power of the Word. Without the Bible’s enlargement of these trivial historical events, the world would never have arrived at some of its most hellish conflicts.

The BM’s show makes all this clear in a thoroughly engrossing display of coffee-table revisionism that sets out to tackle the myths about Babylon. It’s not filled with art treasures. Too few of those have survived. Instead, a thoughtful array of maps, models, texts and photos joins a precious selection of battered artefacts in a concise telling of Babylon’s story. The most exciting artworks on display are western pictures trying hopelessly to visualise distant Babylon.

Thus, John Martin, a Victorian precursor of those set designers preferred by Bond villains, paints the destruction of the city as a huge production number, with a cast of thousands rushing hither and thither while the sky explodes into cosmic fireworks. And who can forget how unpleasantly William Blake chose to imagine Nebuchadnezzar? It is one of Blake’s creepiest fantasies. Crawling naked through a cave on all fours, with grotesque talons growing from his hands and feet, his unkempt beard dragging along the ground, he bears no possible resemblance to the potent historical figure who created the Hanging Gardens of Babylon, the Tower of Babel, the extraordinary Ishtar Gate and all the other architectural wonders for which ancient Babylon was famous.

An evocative opening panorama makes clear how impressive Babylon was. The processional walkway through which you entered the city, lined with a tiled parade of walking lions, can still be seen, largely intact, at the Pergamon Museum in Berlin. The Germans were the first modern archeologists there, and successfully shipped home not just Babylon’s processional approach, but the entire Ishtar Gate.

Nebuchadnezzar, who ruled Babylon for a remarkable 45 years, from 605-562BC, was a manically ambitious builder. Under him, the city grew to the size of Chaucerian London. The show’s next high-light is a visualisation of the famous tower he erected at the centre of his looming metropolis. According to the Bible, the Tower of Babel was where the world’s many languages were born before spreading across the globe. Yet, somehow, even this helpful development has been viewed in a negative light. “Babble”, after all, comes from Babel. And look how many western artists, from the celebrated Bruegel to the obscure Julee Holcombe, have imagined the great tower as a madman’s tottering folly.

In fact, we know exactly what it looked like. Surviving inscriptions even give us its measurements. A gigantic square ziggurat made of sun-baked bricks, the real tower was Babylon’s central shrine, a mystic embodiment of a mountain, up which Nebuchadnezzar would be hoisted to bring him closer to his god. An excellent model brings it all to life.

Less precision is possible with the celebrated Hanging Gardens. They may have been one of the wonders of the ancient world, but nobody at the time thought enough of them to record their appearance. Probably, they were staggered garden terraces, rising up in the city, through which the king would stroll. In a brilliant flash of exhibition-making, the show includes an Assyrian relief of a typical contemporary garden, in which the original colours of the relief have been imagined. This sudden addition of colour turns a daunting sculpture into a chirpy one. I hate to think how many ponderous civilisational conclusions have been mistakenly arrived at because the paint wore off.

There can be few more daunting artefacts to include successfully in a show than a cuneiform tablet. Who among us can stare at one of these jumbles of incisions and see meaning in it? Certainly not me. So considerable acclaim should be heaped on the heads of these particular exhibition-makers for daring to include so many writing tablets and for making them so damn interesting. To see names and situations made familiar by the Bible being described so vividly from another angle is such an eye-opener.

I was particularly intrigued by a religious tablet in which an attempt is made to explain how the many Babylonian gods are actually different manifestations of Marduk, the supreme god. A nascent monotheism is clearly emerging. And a brave man even might argue that, on this evidence, the Jewish belief in a single supreme being must originally have been influenced by Babylonian thinking.

Thus, this riveting display isn’t merely illuminating a brilliant ancient society about which we know only what we have read. It’s a show about a terrible ancient prejudice that continues to pour petrol on our bonfire. Would the Americans have plonked a military base on the remains of the Parthenon as deliberately they did on the remains of Babylon? I suggest not. The war we are now fighting in these ancient lands takes on a different and bigger meaning when we recognise how deeply these prejudices have sunk into our psyche.

Babylon: Myth and Reality, British Museum, WC1, until March 15, 2009 www.waldemar.tv

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