St Petersburg: Paris of the North or City of Bones?

When G8 leaders sit down in St Petersburg next weekend, the ground beneath them will silently groan with the weight of the dead. Known as "the city built on bones", St Petersburg's foundations sit above the skeletons of the press-ganged slave labourers who toiled to erect it. Historians believe the remains of some 100,000 18th-century serfs are buried beneath its wide Parisian-style avenues and grand Italianate palaces.

Drawn from the length and breadth of the then Russian Empire, they expired from cold, from hunger, from disease, or if they were really unlucky, from the wolves. They gave their lives for the glory of then Imperial Russia and what they created, St Petersburg, stands as a monument to the single-mindedness of the Russian state.

When G8 leaders feast on caviar and quaff champagne, perhaps after discussing debt in the developing world, they are unlikely to spare a thought for the unfortunate slave labourers who built St Petersburg.

They should, for if they want to understand Russia and its complexities, once described by Sir Winston Churchill as "a riddle wrapped in an enigma", they need look no further than St Petersburg's incredible history. Its elegant palaces reek of European refinement and were deliberately built in a Western style in an attempt to bring Russia closer to Europe.

But more than three centuries later, it is an odyssey Russia has yet to complete, and St Petersburg is a testament to how difficult that journey has been.

About a quarter of its population is estimated to have perished in Stalin's purges in the 1930s and more than one million of its citizens died in the siege of Leningrad as it was known in the Second World War. People were so desperate to survive and food so short during the 900-day siege that they boiled shoe soles, stripped and ate bark from trees, traded their bodies for food, and, some reports say, turned to cannibalism.

Today, St Petersburg's grim history seems distant; the city is starting to feel the benefits of Russia's oil boom, is smarter than at any time in its recent history, and has a new, confident feel about it. It is President Vladimir Putin's home town and he is anxious that the G8 summit becomes a showcase for St Petersburg and for Russia's achievements.

But history is never far from the mind of any Russian and when Mr Putin glad-hands the leaders of the world's most powerful nations, he is likely to have one particular historical figure in the back of his mind: Tsar Peter the Great. Thanks to Peter's iron will, St Petersburg was founded and made Russia's capital, usurping Moscow. Mr Putin is an admirer of Peter, giving pride of place in his Kremlin office to an enormous portrait of the tsar and is even said to see himself as Peter's spiritual heir.

Legend has it that Peter, a giant at 6ft9ins tall, was galloping across the swampy marshlands that lie beneath modern St Petersburg on 27 May 1703 when he had a flash of inspiration. At the the time, Russia was locked in the Great Northern War with Sweden and he is said to have jumped off his horse and plunged his sabre into the soft turf proclaiming: "Here shall be a city."

The modernising, Western-leaning tsar wanted a new capital because he felt the old one, Moscow, was too hidebound by Russia's troubled past. What followed was a triumph of human will power over nature.

Peter was a driven and unsentimental man - he signed the death warrant of his son Alexei because he disobeyed him - so building a new city did not daunt him. As the Russian poet Aleksander Pushkin put it: "His will was fate." There was no ready supply of drinking water, the mosquito-infested swamps were unbearably hot in the summer and fatally cold in the winter, none of his court officials wanted to uproot themselves to such a God-forsaken spot, and the area was prone to flooding.

But Peter was adamant that Russia needed to cut itself a "window on the west" (St Petersburg is geographically close to Finland and the Baltic states), and harnessed European expertise and Russian manpower to do so.

Serfdom, when peasant labourers were de facto slaves sold with plots of land, proved useful. They were dragooned into building St Petersburg, along with Swedish prisoners of war (Russia won its war against Sweden in 1721). Russian historians estimate that in the first 18 years of construction, 540,000 serfs toiled on the city. Estimates of how many died in the process vary from 30,000 up to more than 100,000. When their wretched lives ended, many were buried where they fell and their names are unknown. One 19th-century Russian historian wrote: "It would be difficult to find in the annals of military history any battle that claimed more lives."

The historian Yevgeny Anisimov wrote: "Workers were forced in convoys to the capital from all over the country. There they were forced to live for several months in dugouts, in cabins, or in the open air. The food was meagre and there was no medical provision."

Peter ordered every citizen owning more than 500 serfs to erect a two-storey building in the new city and banned the use of stone in construction elsewhere in Russia to overcome a shortage of stonemasons. With the help of German engineers, the marshes were drained, canals cut, and Peter ordered that every ship that docked bring tons of soil to help reclaim the swamps. Peter died in 1725 after he had laid the foundations of St Petersburg. Historians disagree on why he called the city St Petersburg; some say it was in honour of St Peter, others that he named it in his own honour.

Peter's heirs carried on where he left off, drafting in celebrated foreign architects, many of them Italian, to complete the city. Catherine the Great (1762-96) was probably the most active, overseeing the completion of the Winter Palace, a building that today houses the world-famous Hermitage art museum. Inspired by Peter, Russia's rulers created a capital city that could rival Paris or London for beauty.

But as history turned out it was not a place destined for quiet urban living ,but for revolution. The first signs that it could be a melting pot for radicalism came on 14 December 1825, when Tsarist officers commanding some 3,000 men refused to swear allegiance to the new tsar, Nicholas 1. They demanded liberal reforms and an end to autocracy instead but their plans for an uprising ended in abject failure due to poor organisation. The plotters, known as "the Decembrists" were swiftly defeated and exiled to Siberia.

Eighty years later, on 22 January 1905, amid growing dissatisfaction about autocratic rule, a left-wing priest called Father Gapon led a procession of workers to the Winter Palace to hand in a petition demanding change. Though the demonstrators had deliberately placed women and children in their vanguard, troops opened fire on the unarmed crowd and 1,000 people were killed or wounded. The massacre triggered strikes and uprisings across the country (including the famous mutiny aboard the battleship Potemkin) and Tsar Nicholas II was forced to agree to far-reaching constitutional changes to stop the unrest.

Twelve years later, in February 1917, St Petersburg (which had by then been renamed Petrograd to sound less German because the First World War had started) was witness to the tsar's humiliating abdication. As his authority crumbled and internal strife took hold, a provisional government assumed the reigns of power, ending three centuries of Romanov rule. Eight months later, Petrograd was to become a crucible for a far bigger revolution.

In October 1917, Vladimir Lenin and the Bolsheviks seized power in the city, turning Russia turn into the standard-bearer of world Communism until the Soviet Union collapsed in 1991. On 25 October 1917, the Red Guards occupied key government buildings in Petrograd and launched an assault on the Winter Palace on 6 November. That attack was immortalised in Sergei Eisenstein's propaganda masterpiece October: Ten Days that Shook the World.

The film over-dramatises the event: in reality the Bolsheviks easily overcame a rag-tag collection of women and military cadets. The October revolution caused the city's fall from grace and Moscow's comeback. Petrograd was too close to the border for a paranoid Lenin's liking, and he ordered the capital moved back to Moscow in 1918.

During the Second World War, the city, renamed Leningrad to honour the revolutionary leader, suffered some of its darkest days when the Nazis laid siege to it from 1941 until 1944. Hitler had been apparently so confident of victory he is said to have printed invitations to a victory party in the city's Hotel Astoria. That party never did happen.

The city's post-Soviet history was inglorious; in the anarchic 1990s, it became infamous for contract killings, corruption and the mafia, when Vladimir Putin was cutting his teeth in local politics. Today it is enjoying a quiet renaissance, and its energetic pro-Putin governor Valentina Matvienko is trying to turn it into a Russian Detroit: Ford, Toyota, General Motors and Nissan have committed to building cars there.

Inquisitive tourists are offered "Putin tours" of the President's old school, the law faculty where he studied, the judo club where he trained, or the apartment building his family lived in.

The city can also boast that it has produced or inspired a Who's Who of world culture. Fyodor Dostoyevsky set Crime and Punishment here, Leo Tolstoy used the city as a backdrop for much of War and Peace and Nikolai Gogol, Aleksander Pushkin, and Anna Akhmatova all lived in St Petersburg (as it was renamed again in 1991) and drew inspiration from it. Its famous Kirov (now Mariinsky) theatre is no less star-studded: it has played host to Rudolf Nureyev, Mikhail Baryshnikov, Rudolf Nureyev, Vaslav Nijinsky, and Anna Pavlova.

The composers Peter Tchai-kovsky, Dmitri Shostakovich, Modest Mussorgsky, Nikolai Rimsky-Korsakov, and Mikhail Glinka all worked in the city, as did the painters Marc Chagall and Kazimir Malevich.

Today, headlines about St Petersburg are less glorious. The city has become a crucible of race hatred, with white supremacists hunting African and Asian students, now and then murdering them in the name of "a Russia for Russian only".

The city also has a serious problem with Aids and homeless street children, and though the city centre has been beautifully restored, much of its breathtaking baroque and classical architecture is slowly rotting in its quiet side-streets due to a lack of government money.

St Petersburg is a microcosm of Russia; its history is tragic and steeped in blood yet awe-inspiring and world-changing, its cultural heritage fabulously rich, and its future uncharted but full of incredible potential.