Of all the places in all the world, the century had to pick this one

This is where Time Present meets Time Past. A few score miles to the east, across the frozen Bering Sea, lies the International Dateline, the United States and yesterday. Head west across the tundra, and you also traverse back in time through the 24-hour-sized segments that girdle the planet. There is no later hour than here; this is the first time zone, one of its bleakest parts. It is here, in Russia's far north-east, that in one year's time this millennium will quietly slide into the next. Long before the citizens of London, Paris and New York have gathered to toast the first few seconds of the New Age, it will have dawned here on a world which, though permanently ahead of the clock, is heading backwards.

Welcome to Chukotka, the meeting point between Asia and the West, a region the size of France but which now has a smaller population that Reading. Welcome, to be more precise, to Anadyr, the regional centre where we have arrived as guests of the governor at the start of a four-day odyssey over the Arctic lands which he seeks to rule.

When, on 1 January, 2000, the sun finally drags itself above the horizon for a few sallow hours, it will illuminate these wide streets of ice, these dreary apartment blocks, shacks on stilts, and empty steel containers (testimony to the steady depopulation). In Fiji, New Zealand or Vanuatu, which share its time zone, the next century's first view of the world will surely be idyllic - but not here.

It is Saturday, but we are wondering where most of Friday went. On Thursday evening we boarded our charter plane in Moscow - nine hours' flying time and nine time zones away - and late Friday night we disembarked. Our party comprises about a dozen Moscow-based journalists and a blonde, mink-wrapped Moscow TV star called Aida Nevskaya, who seems to spend her time scouring the empty landscape in search of fans, and who - bafflingly - has brought her sunglasses with her. Some of the group say they caught a glimpse of the day through the plane window, a red rag of light waved briefly at us from the horizon. But most of Friday was lost.

So Saturday it is. Today our host, the governor, a stout and energetic man called Alexander Nazarov, summons us to tell us about Chukotka's economic prospects and problems. We are here because he is keen to attract international investment in the gold industry, as his semi-autonomous region has the second-largest reserves in Russia. He also reveals that he is planning to erect an international hotel in Anadyr, where the world's media can stay when they arrive to cover the opening of the millennium (the BBC is already expressing interest).

Later, he tells me that he has "big plans" for the special day. "We will set the tone for the new millennium," he declares. He doesn't, however, give any details.

Certainly, the new hotel is a good idea. The current one is a run-down Soviet affair where the governor's enthusiasm for the new millennium is not shared by the staff. "We aren't interested," says Tanya Simkochova, 41, an administrator. "We have more important worries." Like, for example, wages: she hasn't been paid for four months.

Anadyr also needs a new restaurant. There are only two in town, one of which is a gloomy little dive that calls itself a pizza house. Here I am given a bun, with reindeer meat buried in it. Everyone eats reindeer here, even for breakfast (it costs just over a dollar a kilo). The residents hang plastic bags of it out of their apartment windows. In these temperatures, there's no need for a freezer.

Max, a client of the pizza house, looks like a reindeer-eater. He is a human tank with a tundra-like, quarter-inch haircut whose drink-fuelled desire to speak English far outweighs the minor inconvenience that he doesn't know any. But it is clear that the young man is not happy. "We - have - big - girls," he says, gesturing at a table of women. Why, he asks - switching to Russian - won't we dance with them?

So this, we can assume, is what New Year's Eve 1999 will look like in Anadyr. At the end of the room, a solemn-faced man dressed like a Sixties Butlins redcoat is playing the "Macarena" on electric guitar. Soon the big girls are dancing hard, their feet thumping the worn floorboards.

SUNDAY: We set off in a 14-year-old Soviet AN-24 propeller plane north for Egvekinot - an old Gulag town - and then on by a battered Mi- 80 helicopter to Konergin, a hamlet of 700 people mostly occupied by Chukchis.

History has been unkind to the Chukchis, the region's largest non-Russian ethnic group. For centuries, they lived on the tundra, subsisting on reindeer herding and hunting whale and walrus, while Russians, Americans, Britons and other adventurers swept in and out in search of furs and gold. But the Soviets decided to collectivise their herds (a task that they were still struggling to accomplish by the Fifties) and put their children into boarding schools to force-feed them with Moscow's ideology. Severed from their roots and traditions, the Chukchis fell victim to drink and social despair. They are now a favourite butt of Russian jokes - like the Belgians to the French.

There will be no pre-millennium tension here; no fretting about which frock to wear, or which party to go to. Here, like Anadyr, there are more pressing matters, such as survival. Any Chukchi born today is not likely to make it beyond four decades or so: average life expectancy has fallen to between 40 and 45. For most adults here, their experience of the next millennium is likely to be fairly brief.

MONDAY: It is beyond comprehension that anyone should live in a place as cold as this. The low hills and forests of central Chukotka are cloaked in a grey haze of deep, deep refrigeration. It is like glimpsing the Ice Age. At minus 49 Celsius, the air is so cold that it scalds the lungs.

A rouble banknote held between the fingers turns brittle in seconds. A half-eaten Mars bar turns so hard you can cut yourself with it. Touch a metal door handle without gloves, and you hit the pain zone where the fingertips cannot tell if they have been burnt or frozen.

We have flown west to Bilibino, 60 miles north of the Arctic Circle. The 11,000 residents (half the town's Soviet-era population) have various means of keeping warm - we meet one woman wandering around clutching a hot water bottle under her fur coat - but the main source of heat comes from a big concrete atomic power station a few miles out of town.

You might think that Bilibino's residents are none too happy about living on top of a nuclear station. Far from it. They like the plant. It guarantees them heat and light, treasured services in an ice-world where nothing else is certain. "You get used to it," says Ludmilla Dubina, a school librarian, who has lived here 23 years. "It is better to live near an atomic station, and have heat, than not to have any."

Vladimir Boiko, the local police chief, was living in Ukraine, his native republic, when Chernobyl blew up in 1986; yet he, too, has nothing bad to say about the power station. "What do I care? At least we're warm," he grins. And that's true: Bilibino almost seems to revel in its round- the-clock heating: in the foyer of the sports centre, there are lemon trees growing in pots.

The governor is keen to show off his nuclear plant, so we drive there across the ice roads in Jeeps, their interiors lined with thick carpet to keep out the cold. Within, it is smart, bright, clean and busy. The conference room, where the acting director meets us to explain how his plant abides by international safety standards, is adorned with plaques proclaiming its excellence. These would have been more reassuring if several cameramen had not managed to get into the reactor area, unescorted and unprotected, while the governor's party and the staff gathered to toast each other with cognac.

The governor and his crew know they can get out of here. Vladimir Vodolaziski, 54, duty officer in the station's control room, moved to Bilibino 20 years ago, and cannot afford to leave. "I came here as a young romantic, and ended up a prisoner," he remarks. A prisoner trapped in an Arctic nuclear power station, thousands of miles from anywhere. You can hardly make a worse start to the new millennium than that.

TUESDAY: You need to drink to keep warm, to keep your spirits up in this twilight world. I entirely

accept that. The climate here is so hostile that its own football team, Spartak-Chukotka - the governor's pride and joy - is based 5,000 miles away in Moscow for most of the year. But vodka for breakfast? To be fair, there was a choice. Bottles of wine and beer also stood on the table. Requests for soft drinks bring puzzled looks from the restaurant waiters.

In the back of Russia's beyond, they seem to drink even harder than they do in Moscow. As we fly around the emptiness of the Arctic in our propeller plane, like the court of a minor medieval potentate, the governor's band of dishevelled aides crack open bottles of cognac and vodka and gobble down chunks of frozen wild goose meat and sausage. Yesterday, several were so drunk that they could barely get off the plane. The governor himself remains restrained, pondering the mighty issues that face him.

This morning we board the AN-24 and fly to Pevek, a port and mining town built on the edge of the Arctic Ocean six decades ago by prisoners at the height of Stalin's fanatical attempts to colonise the north. Thousands of people died in the process.

It is minus 33 Celsius, but there is a brisk wind coming in from the frozen sea that makes it seem even colder than Bilibino. We are walking along the front when an old woman approaches my colleague, Will Englund from the Baltimore Sun. "Cover your nose quickly!" she says. We notice that, although we have only been outside for a few minutes, the tip of his nose has gone bright white, the first sign of frostbite.

Every story here is a sad one. A group of municipal workers have been on hunger strike for a fortnight because they haven't been paid for three and a half years. "This town is quietly dying," says Alla Yevstigneyevna, 59, the manager of a local grocery store. "It is an irreversible process."

And dying it surely is; the population of the surrounding area has fallen from 34,500 in 1991 to 12,500 today, mirroring a fall that has seen Chukotka's population shrivel to 90,000, half the size of a few years ago. The Soviets - Russians, Ukrainians, Belarussians - are steadily moving out, abandoning the landscape again to the Chukchis and reindeer and wolves. But leaving is costly. Like everyone, Mrs Yevstigneyevna also wants to head for the real, light, normal world... if only she could afford a flat somewhere else.

Ten years ago, when he first arrived, this town was fun, says Dr Alexander Maslov. Like everyone, he was lured north by the promise of higher pay. At 32, he is now chief doctor at the Pevek hospital. A few years back, he earned the rouble equivalent of $1,000 a month, and had a big apartment. The streets teemed with life on holidays. No more. His salary - delayed for months these days, like everyone else's - is worth a fifth of what it once was. "What's happening is very hard to bear," he says.

So hard that some people seem to be on the edge, grappling with total breakdown. When we go to a bar, a middle-aged woman with bright peroxide hair gives us - by way of a gesture of hospitality - a plate of sliced lemons to eat. We return the compliment by buying her a bottle of Russian champagne.

A conversation starts, but within a few moments her mood changes from calm urbanity to tears and anger. "God has forgotten this place!" she bellows, trembling. "We gave everything to the Motherland! But we have nothing now!"

We leave, embarrassed, uneasy, eager now to end this odyssey of the Arctic, unable to offer any suggestion, any hope that would help her, or the rest of this abandoned place, to weather the first years of the new millennium.

Happy New Year, Chukotka. And - when it dawns - may the next century be far, far better than the last.