This bungalow heaven, echoing with empire and Gracie Fields

This is where the millennium runs into the sea. A stumpy white obelisk, with a green globe on top, marks where the Greenwich meridian line plunges over the chalk cliffs of Sussex, outside Brighton, and swims off Euro-wards. The Ordnance Survey has just announced that, for the first time ever, in honour of the millennium, it will mark the meridian on its maps. A green line cutting north and south through the grid squares.

I reach the obelisk down a row of redbrick bungalows. The seafront is a strip of grass on the clifftop. A woman walks her poodle. A photographer from the Evening Argus hovers around the obelisk, taking shots of the chairman of the Peacehaven residents' association. He has plans for the millennium: dances, garden parties, even lasers.

John Livings and his wife used to have a caravan near here. They liked it so much that he sold his business in London. Almost a quarter of the 13,000 people who live in Peacehaven are retired.

Peacehaven is bungalow heaven. To come here is to visit yesterday's future. E J Hobsbawm wrote: "To write about this country without also saying something about the West Indies and India, about Argentina and Australia, is unreal." The obelisk gives distances not only to Greenwich (48 miles), but also to every corner of the empire: Hong Kong, Wellington, Valetta, Rangoon, Belize, Aden. The first stone was laid - to mark the silver jubilee of George V's "beneficent and illustrious reign" - by Charles Neville, the man who invented Peacehaven. He bought the land from 1915 on. He had been a land speculator in Saskatchewan and Australia.

There were bungalows in England before. (The first was built in north Kent in the 1860s.) But Peacehaven between the two world wars, with its scattering of cheap homes for heroes, was something new. If any single place was responsible for the first town and country planning legislation, it was Peacehaven. It symbolised how control of the land had slipped through the fingers of the hereditary landlords. Something had to be done.

The odd thing is that Neville, in the photograph I see in Peacehaven library, looks just like one of the first politicians to take up the rural protection cause, Stanley Baldwin. Neville sits solidly on his chair, cigar in hand, heavy-faced, a watch-chain across his waistcoat.

Even now, Peacehaven is almost all bungalows. I stand on the pavement outside No 182a Arundel Road (which has a little sign to say it is an Avon Collection Point). I see a long low ripple of rooftops.

Peacehaven is the little man's empire. Neville ran a newspaper competition to choose a name. The judges plumped for New Anzac on Sea. But he switched within six months. Memories of Gallipoli weren't the best selling point for his 25-by-100-foot plots, laid out on a simple gridiron.

Bungalows are an imperial invention. They began as the banggolo, a Bengali peasant hut. Public works departments across India mass-produced a solider version: cheap, cool and untiring (because stairless). When the captains and engineers retired back to Blighty (Hindi bilayati), they took the bungalow style with them.

And then it skittered down the social gradient. At least, in England. In America, the bungalow kept its Californian charm. Bix Beiderbecke recorded his own tribute with RKO as Wall Street crashed: "Our little love nest/Beside a stream/Where red, red roses grow/Our bungalow of dreams."

The social history of the bungalow has been written by Anthony D King. "In the first half of the 20th century," he argues, "the bungalow was the most revolutionary building type established in Britain." It was, and remains, far more popular than the multi-storey flats architects thought were just the job for the working classes. Bungalows came off the peg from builders, not off the drawing board from architects. There are no roses this January afternoon, outside Peacehaven's bungalow of dreams. There are battered hydrangeas and fancy heathers.

The Rochdale singer Gracie Fields bought a Peacehaven bungalow for her mother, Sarah Stansfield, and stayed in Peacehaven sometimes between variety shows or films. Peacehaven, then, had a pale extension of Brighton's theatrical tradition. Flora Robson made her first public appearance at the Rosemary Tea Rooms. In her brief first career as an actress, Elizabeth David played the summer season at the Peacehaven Theatre. The tea rooms and the theatre have been demolished. Peacehaven didn't linger over its past. The future was the thing.

But imperial history rolls on. Bengalis and Kashmiris now live in cotton town terraces like those the Stansfields abandoned for a bungalow by the sea. (Peacehaven, meanwhile, is 98.6 per cent white.) And the dream rolls on, also. It has just followed the meridian line due south.

In the window of the estate agent's next to the Peacehaven bus stop, they advertise "A place where dreams come true". This is Costa Azahar, the "Orange Blossom Coast," between Valencia and Barcelona. Here you can "live the difference" on an "unspoilt" coastline. So buy your "freehold house in the sun" today.

Yesterday's future isn't dead. Peacehaven lives again - in Spain.