East and west face each other across a divide that some call a religious war. Suicide jihadis take what they see as defensive action and innocent people are killed. But this is 1857. William Dalrymple on lessons from the Raj for the neo-cons

At 4pm on a hazy, warm, sticky winter's day in Rangoon in November 1862, soon after the end of the monsoon, a shrouded corpse was escorted by a small group of British soldiers to an anonymous grave at the back of a walled prison enclosure. The enclosure lay overlooking the muddy brown waters of the Rangoon River, a little downhill from the great gilt spire of the Shwedagon Pagoda. Around it lay the newly built cantonment area of the port - a pilgrimage town that had been seized, burned and occupied by the British only ten years earlier.

The bier of the State Prisoner - as the deceased was referred to - was accompanied by his two sons and an elderly mullah. The ceremony was brief. The British authorities had made sure not only that the grave was already dug, but that quantities of lime were on hand to guarantee the rapid decay of both bier and body. When the shortened funeral prayers had been recited, the earth was thrown over the lime, and the turf carefully replaced to disguise the place of burial. A week later the British Commissioner, Captain H N Davis, wrote to London to report what had passed, adding:

Have since visited the remaining State Prisoners - the very scum of the reduced Asiatic harem; found all correct . . . The death of the ex-King may be said to have had no effect on the Mahomedan part of the populace of Rangoon, except perhaps for a few fanatics who watch and pray for the final triumph of Islam. A bamboo fence surrounds the grave, and by the time the fence is worn out, the grass will again have properly covered the spot, and no vestige will remain to distinguish where the last of the Great Moghuls rests.

The state prisoner Davis referred to was Bahadur Shah II, known from his pen-name as Zafar (meaning, paradoxically, "victory"). Zafar was the last Mughal emperor, and a direct descendant of Genghis Khan. He was born in 1775, when the British were still a modest coastal power in India, and in his lifetime his dynasty had been reduced to insignificance, while the British transformed themselves from vulnerable traders into an aggressively expansionist military force.

Zafar came late to the throne, succeeding his father only in his mid-sixties, when it was already impossible to reverse the political decline of the Mughals. Despite this he created around him in Delhi a court of great brilliance. He was one of the most talented, tolerant and likeable of his dynasty: a skilled calligrapher, a profound writer on Sufism and an inspired creator of gardens. He was also a serious mystical poet, and through his patronage there took place one of the greatest literary renaissances in Indian history.

Then, on a May morning in 1857, 300 mutinous sepoys from Meerut rode into Delhi, massacred every Christian man, woman and child they could find, and declared Zafar to be their emperor. Zafar was no friend of the British; but he was not a natural insurgent, either. He suspected from the start that the uprising - a chaotic and officerless army of unpaid peasant soldiers set against the forces of the world's greatest military power - was doomed.

The great Mughal capital, in the middle of a remarkable cultural flowering, was turned overnight into a battleground.

The Siege of Delhi was a fight to the death between two powers, neither of whom could retreat. Finally, on 14 September 1857, the British assaulted and took the city, sacking the Mughal capital and massacring swathes of the population. "The orders went out to shoot every soul," recorded Edward Vibart, a 19-year-old British officer. "It was literally murder . . . The women were all spared but their screams, on seeing their husbands and sons butchered, were most painful . . . I feel no pity, but when some old grey bearded man is brought and shot before your very eyes, hard must be that man's heart I think who can look on with indifference . . ."

Delhi was left an empty ruin. Those city-dwellers who survived were driven out into the countryside to fend for themselves. Though the royal family had surrendered peacefully, most of the emperor's 16 sons were tried and hanged, while three were shot in cold blood, having first freely given up their arms, then been told to strip naked. "In 24 hours I disposed of the principal members of the house of Timur the Tartar," Captain William Hodson wrote to his sister the following day. "I am not cruel, but I confess I did enjoy the opportunity of ridding the earth of these wretches."

A fascinating relationship

In 2002, researching in the National Archive in Delhi for a book on the life of Zafar, I found a remarkable collection of 20,000 previously untranslated Urdu and Persian documents that enabled me to resurrect in some detail the life of the city before and during the siege. Cumulatively, the stories contained in these Mutiny papers allowed the great uprising of 1857 to be seen not in terms of nationalism, imperialism, orientalism or other such abstractions, but as a tragic human event for ordinary individuals whose fate it was to be caught up accidentally in one of the great upheavals of history. Public, political and national disasters, after all, consist of a multitude of private, domestic and individual tragedies.

The Last Mughal, published this month, continues the story I began in White Mughals - the story of the fast-changing relationship between the British and the Indians, and especially Muslim Indians - in the late 18th and the mid-19th century.

During the 18th century it was almost as common for westerners to take on the customs, and even the religions, of India, as the reverse. These white Mughals had responded to their travels in India by shedding their Britishness like an unwanted skin, adopting Indian dress, studying Indian philo sophy, taking harems and copying the ways of the Mughal governing class they came to replace - what Salman Rushdie, talking of modern multiculturalism, has called "chutnification". By the end of the 18th century one-third of the British men in India were leaving their possessions to Indian wives.

In Delhi, the period was symbolised by Sir David Ochterlony, the British Resident, who arrived in the city in 1803: every evening, all 13 of his Indian wives went around Delhi in a procession behind their husband, each on the back of her own elephant. For all the humour of this image, in such mixed households, Islamic customs and sensitivities were clearly understood and respected. One letter, for example, recorded that "Lady Ochterlony has applied for leave to make the Hadge to Mecca". Indeed, Ochterlony strongly considered bringing up his children as Muslims, and when his children by his chief wife, Mubarak Begum, had grown up, he adopted a child from one of the leading Delhi Muslim families.

This was not an era when notions of clashing civilisations would have made sense. The world that Ochterlony inhabited was more hybrid, and had far less clearly defined ethnic, national and religious borders, than we have been conditioned to expect. It is certainly unfamiliar to anyone who accepts the usual caricature of the Englishman in India, presented repeatedly in films and television dramas, of the narrow-minded sahib dressing for dinner in the jungle.

Some 200 years before Zadie Smith, Monica Ali and Hari Kunzru all made it into the bestseller lists, and multiculturalism became a buzzword capable of waking Norman Tebbit and the Tory undead from their coffins at party conferences, the India of the East India Company was an infinitely more culturally, racially and religiously chutnified place than the most mixed areas of London today.

Imperial arrogance

Why did the relatively easy interracial and inter-religious relationships so evident during the time of Ochterlony give way to the hatred and racism of the 19th-century Raj? How did the close clasp of two civilisations turn into a bitter clash?

Two things put paid to the easy coexistence. One was the rise of British power: in a few years the British had defeated not only the French, but all their other Indian rivals; and, in a manner not unlike the Americans after the fall of the Berlin Wall, the changed balance of power quickly led to undisguised imperial arrogance. No longer was the west prepared to study and learn from the subcontinent; instead, Thomas Macaulay came to speak for a whole generation of Englishmen when he declared that "a single shelf of a good European library was worth the whole native literature of India and Arabia".

The other factor was the ascendancy of evangelical Christianity, and the profound change in social, sexual and racial attitudes that this brought about. The wills written by dying East India Company servants show that the practice of cohabiting with Indian bibis quickly declined: they turn up in one in three wills between 1780 and 1785, but are present in only one in four between 1805 and 1810. By the middle of the century, they have all but disappeared. In half a century, a vibrantly multicultural world refracted back into its component parts; children of mixed race were corralled into what became in effect a new Indian caste - the Anglo-Indians - who were left to run the railways, posts and mines.

Like our 19th-century forebears, today we have sometimes assumed that liberalism and progress are unstoppable forces in society, and that the longer the nations and religions of the world all live together, the more prejudices will cease to exist and we shall come instead to respect each other's faiths and ways of living. The world since 11 September 2001 has shaken our confidence in this, and led to a reassessment (at least in some quarters) of assumptions about the melting pot of British multiculturalism. Likewise, Company India moved from a huge measure of racial intermixing in the late 18th century to a position of complete racial apartheid by the 1850s.

Pre-emptive action

Just like it is today, this process of pulling apart - of failing to talk, listen or trust each other - took place against the background of an increasingly aggressive and self-righteous west, facing ever stiffer Islamic resistance to western interference. For, as anyone who has ever studied the story of the rise of the British in India will know well, there is nothing new about the neo-cons. The old game of regime change - of installing puppet regimes, propped up by the west for its own political and economic ends - is one that the British had well mastered by the late 18th century.

By the 1850s, the British had progressed from aggressively removing independent-minded Muslim rulers, such as Tipu Sultan, who refused to bow before the will of the hyperpower, to destabilising and then annexing even the most pliant Muslim states. In February 1856, the British unilaterally annexed the prosperous kingdom of Avadh (or Oudh), using the excuse that the nawab, Wajid Ali Shah, a far-from-belligerent dancer and epicure, was "debauched".

By this time, other British officials who believed in a "forward" policy of pre-emptive action were nursing plans to abolish Zafar's Mughal court in Delhi, and to impose not just British laws and technology on India, but also British values, in the form of Christianity. The missionaries reinforced Muslim fears, increasing opposition to British rule and creating a constituency for the rapidly multiplying jihadis. And, in turn, "Wahhabi conspiracies" strengthened the conviction of the evangelical Christians that a "strong attack" was needed to take on the "Muslim fanatics".

The eventual result of this clash of rival fundamentalisms came in 1857 with the cataclysm of the Great Mutiny. Of the 139,000 sepoys of the Bengal army, all but 7,796 turned against their British masters, and the great majority headed straight to Zafar's court in Delhi, the centre of the storm. Although it had many causes and reflected many deeply held political and economic grievances - particularly the feeling that the heathen foreigners were interfering in the most intimate way with a part of the world to which they were entirely alien - the uprising was articulated as a war of religion, and especially as a defensive action against the rapid inroads that missionaries, Christian schools and Christian ideas were making in India, combined with a more generalised fight for freedom from occupation and western interference.

Although the great majority of the sepoys were Hindus, in Delhi a flag of jihad was raised in the principal mosque, and many of the insurgents described themselves as mujahedin or jihadis. Indeed, by the end of the siege, after a significant proportion of the sepoys had melted away, hungry and dis pirited, the proportion of jihadis in Delhi grew to be about half of the total rebel force, and included a regiment of "suicide ghazis" from Gwalior who had vowed never to eat again and to fight until they met death at the hands of the kafirs, "for those who have come to die have no need for food".

One of the causes of unrest, according to a Delhi source, was that "the British had closed the madrasas". These words had no resonance to the Marxist historians of the 1960s who looked for secular and economic grievances to explain the uprising. Now, in the aftermath of the attacks of 11 September 2001 and 7 July 2005, they are phrases we understand all too well. Words such as jihad scream out of the dusty pages of the Urdu manuscripts, demanding attention.

There is a direct link between the jihadis of 1857 and those we face today. The reaction of the educated Delhi Muslims after 1857 was to reject both the west and the gentle Sufi traditions of the late Mughal emperors, whom they tended to regard as semi-apostate puppets of the British; instead, they attempted to return to what they regarded as pure Islamic roots.

With this in mind, disillusioned refugees from Delhi founded a mad rasa in the Wahhabi style at Deoband, in Delhi, that went back to Koranic basics and rigorously stripped out anything European from the curriculum. One hundred and forty years later, it was out of Deobandi madrasas in Pakistan that the Taliban emerged to create the most retrograde Islamic regime in modern history, a regime that in turn provided the crucible from which emerged al-Qaeda, and the most radical Islamist counter-attack the modern west has yet had to face.

Today, west and east again face each other uneasily across a divide that many see as a religious war. Suicide jihadis fight what they see as a defensive action against their Christian enemies, and again innocent civilians are slaughtered. As before, western evangelical Christian politicians are apt to cast their opponents and enemies in the role of "incarnate fiends" and simplistically conflate any armed resistance to invasion and occupation with "pure evil". Again, western countries, blind to the effect their foreign policies have on the wider world, feel aggrieved and surprised to be attacked, as they see it, by mindless fanatics.

And yet, as we have seen in our own time, nothing so easily radicalises a people against us, or undermines the moderate aspect of Islam, as aggressive western intrusion in the east: the histories of Islamic fundamentalism and western imperialism have often been closely, and dangerously, intertwined. In a curious but very concrete way, the extremists and fundamentalists of both faiths have needed each other to reinforce each other's prejudices and hatreds. The venom of one provides the lifeblood of the other.

There are clear lessons here. For, in the celebrated words of Edmund Burke - himself a fierce critic of British aggression in India - those who fail to learn from history are destined for ever to repeat it.

William Dalrymple is the India correspondent of the New Statesman. His book "The Last Mughal: the fall of a dynasty (Delhi 1857)" is published by Bloomsbury (£25)

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