This month, as Brazil spun into its most serious political crisis since the former metalworker Luiz Inacio Lula da Silva became president, a secretary at the office of the minister for culture, Gilberto Gil, said Gil was "on holiday". But in London, we had seen his face and dangling dreadlocks beaming from posters announcing a concert at the London Coliseum. Such is the double life of Brazil's best-known ambassador.

Gilberto Gil, 63, is a suave intellectual, a superfit macrobiotic who follows eastern religions and the Afro-Brazilian cult of Candomble, and often wears a cross. He once admitted that taking auasca, the Amazonian shaman's drug, "made me what I am today". Other influences include bossa nova, north-east Brazilian accordion folk music, Stevie Wonder, Bob Marley, the Beatles, his 91-year-old mother, his Afro-Brazilian father (whose great-grandfather was a slave), Salvador (the city of his birth), and his life in Sao Paulo at the height of the 1960s cultural revolution.

Gil shimmied on to the Coliseum stage in a backwards samba shuffle, his guitar dangling round his neck, and led us into a wild four-syllable chant, before striking the first few electrifying notes of his classic 1977 number "Refavela". With a quietly dazzling quartet, he re-created the Eletracustico album on a range of guitars, banjo, accordion, keyboards and Afro-Brazilian percussion instruments - all supporting Gil's velvety voice and jazzy scat singing. The accordion symbolised the north-eastern music he played as a child, there was the one-stringed berimbau that is used for capoeira martial arts dances (which Gil imitated with leaping high kicks), the guitars, violao and cavaquinho were reminders of Brazil's colonial culture, and the tambourines, triangle and drums were straight from its African and Native American heritages. Throughout, Gil paused to dance, do t'ai chi moves and jump like a delighted 20-year-old.

The songs, too, were chosen for their significance - "Aquele Abraco", an ode to Rio written after visiting the UK, the swoony-sweet "Three Little Birds" by Bob Marley and a French song, "La lune de Goree", written after his visit to the Senegalese island from where his ancestors would have been shipped to Brazil. Then Lennon's "Imagine", four days after the London bombs, featuring Gil's heart-stoppingly beautiful falsetto, deliberately slow, to emphasise the words: "Nothing to kill or die for/No religion, too . . ." Then, simply, "God bless London" as the spotlight shone on his raised arm and two fingers in a victory sign. That was the closest the minister came to politicking.

Backstage after a ravishing performance, Gil chuckled about the Coliseum's instructions to the audience to stay seated. I told him that while the audience had restricted itself to energetic hand-clapping for the encores, it had risen en masse and danced to his rocking samba-reggae. He was delighted at the disobedience. "Sometimes you have to break the rules!"

Today, halfway through his four-year ministerial term, he admits to having had early anxieties about the responsibility. "It wasn't supposed to happen: my critics thought I wouldn't or couldn't do it. Even friends were sceptical." Yet, after 40 years on the road, he was ready for a change. "Now maybe I've acquired a permanent liking for it." His career traced an inevitable trajectory towards politics.

In 2003, I shadowed Gil for a fortnight, trying to establish how he managed his double life as minister and musician. Answer: the latter is severely curtailed through his contract with the state. He lives in Brasilia, far away from family and friends in Rio. He travels extensively with the president (Gil is a useful, multilingual, worldly companion). "I've swapped clubs and stadia for offices and palaces, and meetings with my record company for ambassadors and presidents," he said. In his wood-panelled, Niemeyer-designed office, I saw Gil meet representatives from the cultural sector, and witnessed his new interpretation of "culture" in meetings with the powerful Movimento sem Terra (landless people's movement), whose members arrived with the red soil of the north-east metaphorically on their boots.

Gil is currently addressing the crisis of the favelas (shanty towns) and the appalling waste of the creative energy trapped there. He has always enjoyed a close relationship with these outsiders, particularly after his adoption of the reggae songs of Bob Marley. Two days before his formal inauguration as minister for culture, he visited Rocinha, the sprawling slum in Rio, where crowds chanted, "Ministro! Ministro!" as he sang Marley music, in a preview of his inaugural performance to the nation. Bob Marley is a symbolic connection to his Afro-Brazilian background and to the favelas' mostly black underclass - those for whom, before the hip-hop revolution, reggae was the music. At the colossal post-inauguration party in Brasilia, Gil pointedly wore the white tunic of Candomble devotees. "The crowd was very emotional," he told me two days later. "I cried then."

In principle, Gil's policies have not changed much: he has always interspersed his set with labyrinthine speeches, mystical thoughts and visionary comments on politics, environmental issues and racial harmony. Audiences sing with him in gentle, reverent choruses.

At the moment, however, he needs them to sing with him more than ever. President Lula is struggling with the most urgent political emergency of his presidency: claims of corruption. Allegations of payola for votes among his inner cabinet, and supposed monthly payments of $12,000, have already led to resignations and reshuffles. "You could call it a crisis," said Gil, in his clear, careful English, with its sing-song Bahian accent. And the ministry of culture? "Well," he replied, laughing tensely, "I still have my job!" But things are getting worse. The president's eldest son, Fabio, is now implicated. The rumours are that Lula may be out next year. If so, Gil will probably go, too.

Gil's methods of persuasion are highly unconventional, and almost always involve music (he never travels without his guitar). In 2003, at the first Anglo-Brazilian Literary Festival in the small colonial town of Parati, he told the assembled Brazilian and European writers that "culture is as essential and as natural to Brazilian life as beans and rice". Eric Hobsbawm - whose autobiography, Interesting Times, had sold 130,000 copies that week in Brazil - was intrigued by the new minister. "It would be hard to imagine the British equivalent," he said. "The Brazilian pop scene is astonishingly intellectual, so the selection of a pop star isn't as absurd as it would seem." Liz Calder, the festival's co-founder, enthused about Gil's music, which she described as "more eloquent than words. God forbid that he starts reading prepared speeches!"

Today, Gil is as likely to discuss finance as dance a samba. "A loan from the Inter-American Development Bank has quadrupled our budget," he explained. "And that has doubled the money available for music, theatre and the performing arts. We can now subsidise the hundreds of new labels in the expanding independent music sector - which amounts to 30 per cent of the market." This refers to a vast underworld of young musicians throughout Brazil who don't need a Warner Brothers contract to make and distribute new music, but who do require motivation and support.

Two years ago, Gil's stated aim was to "bring the arts to the excluded people". Now he says he wants to "bring them in". This has been made possible by the digital revolution. "We are providing equipment, internet links, money and broadband, eventually to bring [them] out of the ghettos." His advocates come from the young, politicised hip-hop generation: rappers and DJs such as MV Bill and Marcelo D2, who make frequent appearances in London at the Guanabara club, the offshore centre for Brazil's new music. "Referential figures", he calls them.

Gil is aware of the double-edged aspects of the technological advances that underpin his plans. "[Technology] also brings clashes between cultures and countries. Even though it brings us closer together, it leaves some outside," he said. He regretted that individualism is becoming more important than solidarity and co-operation. But Gil is an optimist, and "someone who challenges the establishment". Even if he loses his government job, be assured that Gil will still, somehow, continue to play an important role in the future of Brazil.

Sue Steward is world music and photography critic for the London Evening Standard. Eletracustico and The Definitive Gilberto Gil: bossa, samba and pop are both available on Warner