Tsar of the show: Can the Bolshoi Theatre recover from a controversial $700m refurbishment?

Its colonnaded façade, topped with a sculpture of a galloping quadriga, is one of the enduring images of Moscow, alongside the swirling domes of St Basil's. Inside its walls, some of the most notable moments in the musical history of Russia have taken place; it has also served as a backdrop to momentous political events in the country's history, from Tsarist coronation celebrations to Bolshevik congresses. It was from the stage of the Bolshoi Theatre that the foundation of the Soviet Union was proclaimed. It was here that Vladimir Lenin's death was publicly announced.

This summer, there has been a different kind of frenzied activity inside Russia's prestigious home of ballet and opera. Battalions of builders, artists, goldsmiths and engineers have been toiling round the clock to complete a total renovation of the building before its September reopening. The landmark building has been closed for the past six years, undergoing a total overhaul. It has been treated to countless alterations over the years, but by 2005 there were fears the building would collapse completely.

Mikhail Sidorov, the contractor overseeing the renovations, says there are 3,600 workers currently operating in the building, as well as 1,000 highly-skilled specialists, working with the gold, fabrics and mosaics around the theatre. The renovators brought in 162 goldsmiths alone from across Russia, as there weren't enough in Moscow for the amount of work required. On a tour around the site, I can see dozens of workers crouched in the foyer, threading tiny chunks of stone imported from Italy onto latticed thread, later to be glued together and transformed into floor mosaics. Everywhere, there is painting, drilling and hammering, and once an hour cleaners glide through the commotion to remove dust.

Perhaps the most extraordinary part of the restoration process is the application of gold leaf that, when complete, will give the theatre a sumptuous appearance. Over three kilograms of gold – applied in a layer thinner than a human hair – has been used to cover the ornate papier-mâché patterns that adorn each of the theatre's dozens of boxes.

All of which is very impressive, but the refurbishment of the Bolshoi has not been smooth. Work has dragged on and the budget ballooned. An investigation was opened into the misappropriation of millions of dollars. In the meantime, Bolshoi's ballet and opera troupes have been squeezed into tiny rehearsal facilities, limited to performing on the theatre's New Stage, a garish new-Moscow construction.

The theatre has an extraordinary history of cultural and historical upheaval stretching back over two centuries. The first theatre on the spot of the current Bolshoi was set up by an Englishman, Michael Maddox, a tightrope walker who came to Russia to seek his fortune in the 1770s. His first theatre was built on the spot in 1780, and was known as the Petrovsky. The theatre burnt down in 1805, and was later taken on by the Tsar's Theatre Directorate, making it a 'government theatre', which it has remained to this day. The new company performed in a wooden building that subsequently also burnt down, this time in the great fire of 1812 that ravaged Moscow as Napoleon briefly took control of the city. In 1825, the Bolshoi returned to the spot of Maddox's theatre, and a grand new building designed by the Russian-Italian architect, Joseph Bové.

Fire struck yet again in the 1850s, and the only remaining features from the 1825 theatre today are the legendary columns. The theatre was reopened in time for the coronation of Tsar Alexander II in 1856 – and has not been renovated since.

"At the end of the 19th century, the Bolshoi had the best acoustics of any major opera house in the world," says Sidorov. "But after alterations during the Soviet period, it wasn't even among the top 50." The Tsarist-era theatre had a unique violin shape, which gave it its extraordinary acoustics, but when a space underneath the theatre was filled in with concrete in the 1950s, everything was ruined, says Sidorov. "It was the equivalent of putting a violin onto a table and trying to play it like that. All the resonance was lost."

There are some modern additions – lifts will be installed, for example. The stage will be 21 metres by 21 metres, with another 20 metres of depth backstage, and will have two different floors – one for opera, which will reflect sound up into the auditorium, and one for ballet that will muffle sound and provide a cushioning to protect the legs of the company's ballet stars. But by and large, the plan is to return the theatre to how it looked in 1856.

If Lenin had got his way, the theatre might have been closed nearly a century ago. In the end, the Bolsheviks decided that rather than close the theatre, they would appropriate it. The double-headed eagles were replaced with hammers and sickles, and the balconies were draped with slogans extolling Communism.

One of the more notorious episodes in the history of the theatre came in 1936, during a performance of Dmitri Shostakovich's opera Lady Macbeth of Mtsensk. Joseph Stalin, in the audience, was disgusted with what he saw and stormed out. The composer was subsequently pilloried in the press, and his opera removed from the repertoire.

More recently, a production of Nikolai Rimsky-Korsakov's The Golden Cockerel put politics back on stage. In the opera, the Tsar's two quibbling sons are sharp-suited new-money brats, and his every move is shadowed by snipers and sniffer dogs. In the final scene, a military parade involves huge missiles being towed across the stage and dancing children in absurd costumes, glorifying their Tsar. The allusions to the pro-Kremlin youth groups and the overblown Victory Day parades under Vladimir Putin needed no explaining to those who came to see it.

Russia's most famous stage has long reflected what is happening in the country itself. All the talk now is of seating arrangements for the opening gala concert, which will come shortly before the decision on who will run for the Kremlin next year – President Medvedev or Prime Minister Putin. As always, the theatre is causing as much scandal and intrigue offstage as on it.