Despite general gloom in the entertainment world, nightclubs for the young and seriously trendy are the happening scene (as they say in the business)

FOUR o’clock on a Sunday morning in Trafalgar Square, there are usually a couple of hundred people waiting at bus stops. Some wear scruffy bomber jackets, some shiny leggings, some are in black with their faces painted white. In Brixton, Notting Hill, a Hackney an Camden, hundreds more wander along the pavements, some off to bed, some to another club.

London is Europe’s main clubbing city. Rome and Madrid have big scenes, Berlin and Amsterdam have variety, but only London has the size and the mix. According to the British Tourist Authority, in 1989 4% of European tourists said they came to dance. The Japanese are joining in, too: Gaz’s Rockin’ Blues in the West End has a regular crowd of Japanese in impeccable designer scruff.

New York has the high-fashion film-star clubs, but London has a bigger grassroots scene. Part of London’s advantage lies in its relative racial harmony. Blacks, who make most of the music, are essential to serious clubs. London imports black American music generated in places that American whites would not venture into-acid house came from black Chicago, for instance-then produces a version for its mixed-race clubbers.

The recession has hurt some clubs. Members’ clubs have had a bad time: people are unwilling to pay a big signing-on fee. Places that rely on tourism have suffered. The older, plusher end of the market has been hit: yuppies with mortgages have cut down on the champagne. Some clubs have closed, some changed hands. Adrian Flack, owner of the small and fashionable Brain Club in Wardour Street, says things are now picking up: “I can really relate to what the chancellor is saying.” But the West End is still thick with rumours of closures.

To keep full, West End clubs have been letting out their premises to promoters and disc jockeys who are in closer touch with the more resilient end of the market, known as the hardcore. The hardcore is under 22, does not own property and may well still live with its lucky parents. If it is in work, it has money to spend. It is serious about music, and will not be seen dead in a place that plays the charts. james Style, who writes on clubs for the independent, reckons that there are 30,000 determined clubbers in London, compared with 20,000 in the mid-1980s.

Fashionable drugs encourage clubbing: they keep you awake all night. Ecstasy, at E15-20 a tab, is the most popular; for those with less money, speen is [British Pound]12-15 a gramme (enough for ten people for an evening). Unlike alcohol, which makes young men aggressive, ecstasy convinces people that the world is their friend, so hardcore clubs tend to be rather amiable places.

Acid-house parties, the most visible symptom of the nightlife boom, were stamped on last year by new laws. Clubs, encouraged by the regular extension of dancing licences until 6am, have picked up the custom. According to Dave Swindells, clubs correspondent for Time Out, new venues are opening more often: three years ago, a couple of new clubs opened in a year, whereas now there is a new one every month or two. About 50 heterosexual clubs are mentioned in Time Out. But by no means all clubs are listed. Advertising is not cool-serious clubbers rely on word-of-mouth-and unlicensed clubs do not seek publicity.

The hardcore market is highly fragmented. The biggest scenes are:

* Acid house. The music is Fast and furious, the crowd is a bit maler, whiter and more working class than others. The clothes are baggy and deeply unsexy. No smooching.

* Hip-hop and rap. The people are younger, blacker and flasher – “Lycra-ed out”, as other scenes put it. There is more sex in the air and an occasional whiff of violence.

* Funk/soul. Slower music: some clubs guarantee a maximum number of beats per minute. The customers smooch and chat.

* Reggae. Gentle jamaican music, now having a revival.

Beyond these are the Latin, African and jazz scenes, grunge music (favoured by hippies), the Goths (black clothes, white-painted faces, found in the intrepid Fox in Soho).

Since the customers are easily bored, venues offer different scenes on different nights, and promoters and DJs hop between venues. The DJ is the key to success. Top DJs have taken over much of the ground that pop stars used to occupy. As well as music, the customers want a bit of art: promoters employ artists to design light shows.

The business can be exceedingly profitable. A top DJ can make [British Pound]700 an hour, appearing at three venues a night. Since inverted snobbery demands that the premises should not be too plush, rents are low. VOX, a popular new place in Brixton, happens in a former warehouse customers are welcomed by a large “Loading and Unloading” sign, and descend into the club in an industrial lift). Other places are squatted: according to a promoter, if you find a good railway arch, spend [British Pound]3,000 on hot DJs and incidental costs and get the word around, you could get in 1,000 people at [British Pound]8 a head.

On the other hand, nobody may come. Fashion is a slippery business, and the fashionable are fickle by nature. This has discouraged the big entertainment chains, which leave the hardcore to young entrepreneurs with a feel for what their demanding peers want. The business is run by people in their early 20s, black and white, whose lack of interest in publicity probably has something to do with the tax authorities. Interviews with them are interspersed with calls from their parents asking if they will be home for dinner. Some make a lot, and many make a living.

Students rock the house!

There is some biggish investment going on, though. The most happening place at the moment, the Ministry of Sound, which opened two weeks ago, is huge, licensed for 1,200, with a sprung dance floor and a sound system, said to be the best in Europe, that directs thunder at the dancers and quiet at the alcohol-free bar. Set in the grey concrete of south London’s Elephant and Castle, the club has the atmosphere of a high-security jail. Searchlights scan the queue, fearsome bouncers frisk the customers down to the bottoms of their cigarette packets and police vans cruise suspiciously. It is supposed to give customers the frisson of an illegal acid-house party. They seem to like it.

In one way, recession has helped the club business: the property slump has increased the supply of venues. Sir Terence Conran’s Docklands venture at Butler’s Wharf collapsed last December; with the development in limbo, warehouse parties have started happening there. A DJ speculates that this Christmas, there will be a rash of illegal parties in unlet Docklands buildings. Why not, he suggests with a visionary gleam, in Canary Wharf?