In fantasy land

Potsdam is other-worldly. Here, in a palace called Sans Souci - meaning 'without worry' or 'carefree' - the King of Prussia discussed philosophy with Voltaire, listened to Bach perform, then tended his vineyard in a region unknown for wine. Here, a baroque city was built, with an imitation Dutch town and a replica Russian village. Here are royal parks with fake medieval ruins, pseudo-Roman villas and a pump-house disguised as a Moorish mosque. Here was the dream factory of early German cinema, of Metropolis and Marlene Dietrich. Here, Albert Einstein worked on his Unified Field Theory for 20 years. Here, in a 1945 summit, the Big Three powers calmly carved up the world as if it belonged to them. Here, on the subsequent border of east and west, the Cold War was played out in spy games on a ghostly steel bridge.

Located an hour from Berlin's city centre by train, in a leafy land graced by lakes and woods, with swathes of ancien regime splendour and 20th-century fantasy, Potsdam is a relaxed contrast to the purposeful energy of the remade German capital. It is the polar opposite of the glitzy, ritzy Potsdamer Platz commercial centre that epitomises the new downtown Berlin and for which it provides the name. But there are sinister undertones - for here also are some of the origins and engines of successive German war machines: Prussian army parade grounds, the palace of the Imperial Crown Prince (the Kaiser's son and heir), the Nazis' propaganda film factory.

Potsdam is a multi-layered experience, worth weeks of investigation and resonating with the forces of good and evil, with fevered fantasy and vaulting ambition, artistic creation and power lust, scientific discovery and superpower chicanery. It's also a nice walk in the park (500 hectares to roam) and great for messing about in boats on the impressive River Havel. Much of it is a Unesco World Heritage site, confirming its cultural and scenic significance.

Now the capital of Brandenburg state, with a popu-lation of about 130,000 and a history reckoned to have begun in AD993, Potsdam celebrated its millennium in 1993. But the former country town really hit the map in the 17th century when the Great Elector, Friedrich Wilhelm, built a road lined with lime trees from his Berlin palace to his new summer palace in the 'burbs. In the 18th century, Frederick William I, the Soldier King, turned Potsdam into a military town, the base of the fearsome Prussian army.

Then came the era of fantasy. Frederick the Great, the philosopher king, built an exquisite palace called Sans Souci with a sloping vineyard in front of it. Voltaire, Bach, Casanova and Mozart came to the court in the great park. For more than two centuries the Hohenzollern kings filled the town with handsome buildings, rambling parks and whimsical follies. An Egyptian pyramid was built to store ice; a steam-powered pump house was disguised as a Moorish mosque; a reservoir was hidden amid Greco-Roman classical ruins; the Chinese House was built for summer tea parties. Everything was frivolous and unreal: Potsdam became a place where king and court could escape Berlin's pressures, wandering across green lawns or soaking in marble baths as the ancient Romans did. Today, happily, most of these pleasures remain and are open to the public, especially the palaces and parks.

Although the first world war brought the curtain down on the royal house, fantasy didn't end with it, for that's when the dream factory arrived. From 1919, the greatest film studios in Europe arose in the district of Babelsberg. Technically the most advanced in the world and possessing the most innovative directors of the era, the UFA studios produced classics such as Fritz Lang's futuristic Metropolis, Nosferatu, which was the first film to be based on Bram Stoker's Dracula, and The Blue Angel, in which Germany's greatest film star, Marlene Dietrich, rose to fame. In the 1930s, however, the studios fell into the grimy hands of Joseph Goebbels, becoming little more than a propaganda machine for the Nazis, then for the communists after 1945 as the DEFA studios.

These days, Studio Babelsberg is a leader in film technology, producing amazing war-torn sets for the likes of Enemy At The Gates and The Pianist. The studios aren't open to the public, but visitors can go to Filmpark Babelsberg, where they can wander through the weird expressionist scenery of The Cabinet of Dr Caligari and watch a Mad Max-style stunt show. Film buffs should also head to the excellent Potsdam Film Museum in the old Prussian royal stables in the town centre. The museum includes more expressionist sets, a recreation of Dietrich's studio dressing-room and continuous projections of the classics made down the road.

Star-gazing is a Potsdam pastime. An astronomical observatory was established in 1879, culminating in today's Astrophysical Institute Potsdam. Into this search for other worlds came Einstein in 1914, extrapolating his theory of relativity into his Unified Field Theory as a University of Berlin professor. While Lang was imagining future worlds, just around the corner Einstein was figuring out how the universe worked. The centenary of Einstein's 1905 breakthrough, 2005 is being feted in Potsdam and Berlin as Einstein Year. His summer cottage at nearby Caputh has just opened to the public. But the most extraordinary monument remains the Einstein Tower, an organically curved, expressionist-style observatory for making measurements that might validate the theory of relativity. Completed in 1924, it is the star feature of today's Science Park Albert Einstein, which, by the way, Einstein didn't like.

Despite all it has to offer, Potsdam goes down in modern history as the place where the second world war victors met from July 17 to August 2, 1945, for the Potsdam Conference. Joseph Stalin, Winston Churchill and Harry Truman flew to the Berlin they had conquered and met at the Cecilienhof, a huge rambling mock-Tudor pile set in parkland beside a lake. It was built in 1917 for the crown prince of Imperial Germany, who had only one year to enjoy it before the dynasty fell. Kept in superb condition, the Cecilienhof's ground floor is now a museum commemorating the conference. It features the elegant wood-panelled work rooms of the three delegations and the round-tabled conference room where Europe was cut into two. The upper floors form one of Germany's strangest hotels, where, according to the advertising: 'The furnitures [sic] meet the high standard of a luxury castle hotel

and offer the experience of warm, English elegance.'

The peace deal hugely affected Potsdam, rendering it a municipality of Soviet-occupied East Germany. Potsdam remained under communist rule until the 1989 reunification and gained Cold War celebrity with an unlikely monument: the Glienicker Bridge. Spanning the River Havel between west and east Berlin, this grey steel structure was the eerie setting for spy swaps and secret meetings between the United States and the USSR. Most famously, U2 pilot Gary Powers, who was shot down over the Soviet Union, was exchanged on the bridge for Soviet spy Rudolf Abel.

Walking over it these days, with leisure boats sailing underneath, geese flying overhead and a fresh breeze coming off the water, you are in a different world, the reunified Germany, the new Europe of friendship, peace and loads-a-money. Potsdam is always another world.

Getting there: Cathay Pacific (www.cathaypacific.com) and Lufthansa (www.lufthansa.com) fly from Hong Kong to Berlin.