HEMINGWAY CALLED it "liquid alchemy", and Oscar Wilde said its violent hues were "as poetical as anything in the world". Today, almost a century after it was banned for spreading madness, penury and crime, the drink known as the "fée verte" ("green fairy") is enjoying a revival in France thanks to a new generation of wannabe bohemians and an expanding export market in the US.

A strongly alcoholic herbal liquor based on extract of wormwood, absinthe was once the tipple of choice for millions of French men and women - and a source of artistic inspiration in the belle époque - but it was prohibited in 1915 under the influence of the wine industry and the temperance lobby.

Technically, the ban remains in place, but French distillers have circumvented it by calling their drinks "spiritueux à base de plantes d'absinthe" (absinthe-based spirits), while in neighbouring Switzerland, the true birthplace of absinthe, re-legalisation in 2005 after 95 years has triggered a surge in new distilleries.

Most encouragingly, in the past year the American Food and Drug Administration (FDA) has changed its rules on the drink, leading to a rush of imports. In the first six months of this year, of the 167,000 litres of absinthe made in Switzerland, 140,000 were sold to the US.

"It took us years of negotiation with the authorities, but now absinthe is becoming a standard in American bars and hotels, and the basis for many cocktails," said Yves Kubler, whose family first produced Kubler absinthe in Switzerland's Val-de-Travers in 1863.

"Today we have the chance of making absinthe our Swiss national spirit, just as whisky is to the Scottish and tequila for the Mexicans."

In France, the number of distilleries has grown to more than 15, manufacturing under some 50 different labels. Absinthe does not come cheap - an average bottle costs about £40 - but growing numbers of people are rediscovering its virtues, attracted as much by the cultural mystique as by the taste.

"It is a real renaissance. Just a couple of years ago in Paris there were only four or five bars that stocked absinthe. Now there are more than 20 and the number is getting bigger all the time," according to Luc Santiago, who runs the Vert d'Absinthe store in the trendy Marais district of the capital.

"People are drawn to absinthe because of all its nefarious associations, but then when they try it, they realise that this is a drink like no other. A good absinthe has a complexity and a natural freshness that knocks all other alcohols into a cocked hat," he said.

Many of the drink's newest fans are from Paris's Goth community, following the example of their hero American singer Marilyn Manson, who has gone as far as to invent his own personal brand of absinthe, sold under the trademark Mansinthe.

No other drink carries with it as many associations and misapprehensions as does absinthe. Invented some time in the late 18th century, it was sold originally as an elixir in Switzerland before the recipe was acquired by a certain Major Dubied and brought to France.

The drink's popularity spread after the army's occupation of Algeria, where it was believed to protect against malaria and dysentery, and by the 1870s the hour from five o'clock was known as the heure verte. This was when absinthe's links with bohemianism became established, reinforced in the paintings of Van Gogh and Degas and the writings of Wilde and Paul Verlaine.

By the eve of the first world war, more absinthe was being drunk in France than wine, but by then it had become the focus of blame for all the problems of alcoholism. A drunken farmer's notorious murder of his wife and two young daughters was the catalyst for prohibition, first in Switzerland, then in the US and France.

In Britain, by contrast, absinthe was never banned, which meant there was an early revival of the drink in the 1990s. But connoisseurs say that this was built around imports of so-called Czech absinthe, which is a bogus imitation of the real thing.

Much of the mystery surrounding absinthe centres on the chemical thujone, which is the active ingredient in the herb known as wormwood (Artemisia absinthium) and has dangerous psychotropic properties if consumed in high doses. However, researchers now believe that most 19th-century absinthes contained very little of the drug, and modern recipes - which faithfully recreate the originals - stay below the thujone limits set by EU and US regulators.

Bottles of century-old pre-ban absinthe are still highly drinkable and can sell for up to £3000. Other collectables include the spoons, glasses and water fountains that form part of the absinthe-drinker's ritual: ice-cold water is dripped on to the absinthe via a sugar lump placed on a slotted spoon, which causes the clear green liquid to cloud.

"The ritual of preparation is like the tea ceremony in Japan," said Santiago. "It brings together the convivial and the serene."