In the early '80s, Gang of Four's marxist punk-funk polemics reflected the political polarisation of the time. Now, they're cited as the inspiration for a new generation of angular art-rockers. Singer Jon King tells Brian Boyd why they're returning the gift.

At an early Gang of Four gig - the story goes - the guitarist punched the bass player out because the latter had committed the decadent bourgeois sin of putting his foot on a monitor during a performance. It's something that distils the rare essence of a band renowned for their ascetic, neo-Marxist leanings. Radical political theory met a febrile punk-funk sound in the band's musical manifesto and guitar hero poses in the shape of a foot placed on a monitor were regarded as heretical.

Formed by a bunch of Leeds University students in 1977, Gang of Four produced some of the most thoughtful, incisive and lasting music of the post-punk era. Though largely marginalised at the time, the band's music underpins the recent resurgence of angular art-rock, most notably in the loosely derivative sound of Franz Ferdinand, Bloc Party, The Futureheads et al.

A new album, archly titled Return the Gift, has taken the Gang back into the studio to re-record their early work.

"We released the album partly because of the amount of bands citing us as influences," says singer Jon King. "But it's actually more to do with wanting to change how the songs sound. These are versions of the original songs and reflect more what we sound like live. Not many people know that we were once officially the second loudest live band in the UK. Mötörhead were number one. The most authoritative version of us is when we play live, but we didn't want to put out a live album because they tend to be disappointing because of the noise and lack of control. So we tried to record something that captured the feeling of the performances."

Bands who opened for Gang of Four during these 1980s performances include REM, U2, Red Hot Chili Peppers and The Police. When they played in New York, David Byrne would come along and take notes during their set. Both the Chili Peppers and Michael Hutchence asked the Gang to produce their albums. Notable rock writer Greil Marcus would turn up to see them play gigs in working men's clubs in Barnsley. But fame was never an issue for the band and they made a quick exit from what they saw as a corrupt music industry.

"I suppose we were seen as a difficult band," allows King. "We didn't want to play the game. The punk scene never interested us that much. I had spent time in New York - I had a grant to research the work of Jasper Johns - and I had been around CBGB's seeing Patti Smith, The Ramones and Richard Hell. It was very different to what was happening in Britain at the time.

"It was only with the post-punk era that we really developed as a band. We developed a very extreme way of making music; there was no double tracking guitars or harmonising the vocals. It was a severely unornamented sound, very brittle. And we didn't care about record sales."

Songs such as Anthrax, At Home He's a Tourist and To Hell with Poverty were fiercely polemical, dealing with preconceived notions about the nature of politics, the cult of celebrity and the notion of an entertainment business.

"It was a very polarised time back in the early 1980s and we responded to that environment," he says. "At the time, Leeds was a very violent, run down, poor, grimy place. I was looking at some photographs recently for a book coming out about us and it really did look like New Orleans does now after the hurricane. And we were certainly perceived as a grim, North of England band - much like Joy Division. But my main musical inspirations were dub reggae and Parliament-Funkadelic.

"It's interesting, because when we went to the US, we were ignored by the college radio scene and we were only ever played on black music radio."

King is aware of how Gang of Four were a "British Velvet Underground": not many people bought their records, but of those who did, a good few went on to form bands. He is a bit bemused by how many of today's big-selling groups have liberally borrowed from Gang of Four - or, as he prefers to put it, have "translated" their music.

"There was some radio programme that played our songs back-to-back to those of these current bands and that was funny. As for Franz Ferdinand, I think they're a good pop band - and I am a fan of pop music."

Other aspects of today's music world positively enrage him. "Forty years after Bob Dylan wrote Like a Rolling Stone, you have lyrics such as "There are nine million bicycles in Beijing". And the hip-hop world has becomes so corrupt - you now have rappers using product placement in their songs."

The most beautifully ironic aspect of Gang of Four's return (they're touring again and have not ruled out releasing new material) is how earlier this year they offered To Hell with Poverty to the Make Poverty History campaign.

"They sent it back to us," King says. "They said they couldn't use it because it was too political."

Return the Gift is released next Friday on V2