It says a lot about how the radical work of British director Peter Watkins has been marginalised that, today, more people probably know Patti Smith’s excellent cover of Privilege’s theme song than know the movie itself. Savaged by the British press on release in 1967, Privilege, an angry, straight-faced satire about the manipulation of the media to control the population, was swiftly shelved by its studio, Universal, and seemingly disappeared off the face of the planet.

It was Watkins’ first feature, made after he quit the BBC in disgust and a blaze of controversy following the Corporation’s banning (supposedly following heavy lobbying from an alarmed Home Office) of The War Game, his still-horrifying TV pseudodocumentary detailing a nuclear attack on Britain. Fuelled by anger over that affair, Privilege also builds on its hand-held, faux-verité style, presenting itself, perversely, as a documentary on the near-future.

Adapting a story by Alf Garnett creator Johnny Speight, Watkins paints a Britain that has sleepwalked into fascist totalitarianism, ruled by a monolithic coalition government, formed “because of the complete lack of difference between the policies of the Conservative and Labour parties.” Here, we are introduced to messianic pop star Steven Shorter (ex-Manfred Mann singer Paul Jones, whose uncertain, reticent performance is a perfect fit for Shorter’s sullen inarticulacy). A sensation who holds the country in thrall, the act that has made him famous is a bizarre, violent piece of rock theatre that sees him dumped handcuffed in a cell on stage by leering, uniformed guards, and beaten bloody while he sings his signature song, “Set Me Free.”

The performance regularly drives his hysterical fans to riot, but this is all to the good. Shorter is the government’s pet puppet, designed to grant his audience cathartic release “from the nervous tension caused by the state of the world,” and divert their attention from politics. Meanwhile, with Shorter’s every move documented, radio stations playing nothing but his music, and his image adorning everything from badges to shopping boutiques, he also keeps them consuming. In one of the funniest sequences, we see him making a commercial for “The Apple Marketing Board” to tackle Britain’s surplus apple crop.

The most sinister phase of the Steven Shorter project is still to come, though. Having built him into a youth hero, his handlers conspire to have Shorter lead Britain’s youth into “fruitful conformity,” by going straight and pledging allegiance to God and the Union Jack at a mass Christian rally – a stunning sequence Watkins closely, and with deadpan mischief, modelled after the Nazis’ Nuremberg gatherings. The only thing they haven’t bargained on is what’s left of Shorter’s individuality. Worn out and isolated, he’s increasingly resentful and confused, feelings bolstered when he meets Vanessa, a beautiful artist commissioned to paint his portrait (played, in more intuitive casting, by It-Girl Jean Shrimpton).

For four decades, Privilege was extremely difficult to see, but it left its mark on those who did see it. Echoes surfaced in subsequent downbeat rock movies from Stardust to Tommy, not to mention satires from A Clockwork Orange to Britannia Hospital, even if none went so ferociously for the jugular of the beast that fed them. Rediscovered today, though, what stands out isn’t Privilege’s stylistic influence, although it hammers home again that Watkins’ patented psuedodocumentary form has become one of the most popular methods of early 21st century cinema.

What smacks you in the head is how prescient this mad, stark, yet frequently hilarious movie was. From the era that was the supposed high-water mark of protest comes a clear-eyed, prophetic allegory on the co-option of the counter culture, the commodification of youth rebellion, and the rise of a numbing celebrity culture. Every radio station today might not be playing the same Steven Shorter song, but Watkins’ point about a million media outlets all selling us the same basic message is well made. It’s hard not to see Shorter’s shadow looming over all the Live8-style we-can-change-the-world concerts.

Finally, Privilege sounds great. Mainly the work of British 60s producer/arranger Mike Leander, the soundtrack album itself is a cult item. Not only have punkers like Patti Smith, Big Audio Dynamite (who sampled dialogue) and Ian Svenonious (who covered more Shorter songs) paid homage, it seems fair to speculate that David Bowie might have kept Steven Shorter’s rise and fall in mind while creating Ziggy and whole other versions of himself – in particular, around the time of his so-called “Nazi salute.”

Jones imbues Shorter’s poptones, such as the fantastic “I’ve Been a Bad, Bad Boy,” with a sincere, haunted quality reminiscent of the young Scott Walker on the brink of going weird. Equally striking, though, is the surly, identikit garage band formed to support him, strumming out a solemn Merseybeat “Jerusalem,” in black turtlenecks and armbands. It’s like George Orwell’s A Hard Day’s Night.