At the height of the economic boom a decade ago, while futures, champagne and bad debt swilled around Canary Wharf, the sounds emanating from tower blocks barely a mile away served notice that there was more than one east London. Long before the Sun ever talked about "The Brrrap Pack" and Tinchy Stryder scored two No 1 singles, his fellow teenage producers, MCs and DJs from Bow E3 – mostly school-friends – created a sound that has stood the test of time.

Grime sounded as if it had crash-landed in the present with no past, and no future. It was never supposed to be about nostalgia. But after over a year of trawling through old hard-drives and piles of vinyl, the two main producers from Ruff Sqwad, Rapid and Dirty Danger, are re-releasing the tracks that established the reputation of arguably the genre's greatest-ever crew.

"These," Rapid explains, as we settle down in a council flat near Canary Wharf, "are the anthems. The tunes people remember us by. The ones people have been asking for ever since."

Grime fans have never been able to get hold of these tracks at full quality, even though they know every bar inside out: from dancing to them in clubs, from mix CDs, or from pirate radio – sure, they're all there on YouTube, scuzzed in tinny digitalia, encoded at a bitrate lower than the temperature of a London winter; or you can pay exorbitant amounts of money to a secondhand vinyl seller, as many desperate DJs have done. But now these lost Ruff Sqwad instrumentals are being made available – and it's a glorious reminder of one of the most creative moments in modern British music.

It's a sign of how precocious they were, that asked when they first starting making beats, Rapid and Dirty can only place it by school year: "I think I would have been year eight or nine," Rapid says, eventually agreeing to tie this to a calendar year (2002). "We had a parents' evening, and my teacher said: 'He needs a PC, to be doing his homework, and research and stuff,' and my dad was sort of embarrassed, so a week later he went out and bought me a Packard Bell, which came with all these programmes."

Dirty had a similar experience, pressuring his dad to buy him a PC, so he could play games. "Then one of my brother's older friends had a copy of FruityLoops 3, so we just started messing about with it." They pulled in their school mates, including the emerging core of Slix, Rapid, Dirty Danger, Tinchy Stryder and Shifty Rydos, but it was never supposed to be serious. "We were just a bunch of boys from the ends. We went under the name Ruff Sqwad for a joke thing really."

Listening to garage crews such as Heartless Crew and Pay As U Go, and practising in local youth clubs and the playground, they soon realised they were lacking grime's greatest currency: exclusive ("white label") tracks. "We thought this is the way forward, we need our own dubplates." Rapid recalls. "Tings in Boots was the first one: I liked it, Stryder liked it, Slix liked it; we came up with a little hook, and went down Locomotion's house. Locomotion's dad was the person who owned Music House [an infamous grime studio], the person who actually cut the dubs in there. So we bunked school one day, the three of us."

"I was supposed to be on that track too," Dirty interjects, laughing – "but I didn't dare bunk school." From there the, dubplate of Tings In Boots was sent out to the grime scene's biggest DJs, and started becoming a fixture on London pirate radio. "That was when Stryder first got eyes on him. People were saying: 'Who's this little boy with a small voice, spitting hot verses?'" It was a strange experience, leaving their small part of east London – their geographical horizons as narrow as the musical ones were broad. It was no small thing for a group of east London teenagers to travel to parts of north London or Essex ("even Dagenham!" Dirty exlaims) to get their records played on radio, or visit a vinyl-cutting studio.

"In a sense, you're risking your life," Rapid says, "because we used to come out of our area, where we're comfortable, taking buses and trains to Tottenham, or walking deep into areas in Hackney from the bus stop. We'd have people asking: 'Where are you from? What are you doing here?' and see people pulling out guns at the radio stations, dogs, whatever.

"But it felt so special. You'd make a beat in your bedroom, go to some tiny room, put it on the decks, and hundreds of people would be listening. That energy was just a next feeling, like you were on top of the world." Their status grew even while they were still practising lyrics during their school lunchbreaks, or making beats in their bedrooms. It was a balancing act, as Rapid recalls: "I'd be in college and get a call from Wiley and he'd be like: 'Come to the studio right now.'"

Before a stint at Rinse FM in the mid 2000s, they moved from pirate to pirate: having crew shows on Heat, Flava, Mystic, and finally Deja Vu FM, which was "like going into a different league". On Deja Vu they would share a line up with Meridian (featuring the likes of Skepta and JME), the legendary Nasty Crew, and Wiley's crew, Roll Deep. "All in one day!" remembers Rapid. "One crazy day of radio." They soon became known outside Bow, for chilling, dark beats; tracks such as Pied Piper, Tings in Boots, and Raw to the Core. "Those early ones were dark, but with a melodic theme," explains Dirty. "No one else knew how to put melodies in such dark music." Those first tracks sound gloriously unvarnished: Pied Piper's squelch-whip noises sound like desperate electronic yelps trying to escape from the machine – the instrumental equivalent of a teenage voice yet to break. During the white-hot period of 2003-5 this already uniquely Ruff Sqwad sound expanded into something much more grandiose: palatial synth melodies, sweeping clifftop strings, and stirring military brass – instrumentals big, bold and detailed enough to stand up on their own, even while their functional purpose was a backdrop for live or radio MC-ing.

On one old Deja Vu FM set from 2004 (available on the free MP3 archive at grimetapes.com), one of the MCs exclaims: "Listen to the instruments singing!"– it's a triumphant example of golden-age pirate radio. "That's how it used to feel to us," Dirty says. "Like the music was actually singing to us."

Even among White Label Classics' varied catalogue of brilliance, one track sings loudest of all: Functions on the Low is quite simply one of the greatest tracks in the history of British electronic music. It was the only song that its creator, XTC, ever completed. In fact, he was barely even in Ruff Sqwad; he was just another mate (and MC Fuda Guy's older brother) who thought he'd give music a go for a bit – and happened to create a masterpiece. (What he did next remains a mystery, although there are rumours he's about to return with more music.) It's a breathtaking five minutes of longing, a fleeting glimpse of the love of your life disappearing into the night – neon lights seen through a torrent of tears. It's so heartbreaking, and yet so addictive, so humane, that the moment it stops, you're desperate to have it back.

"Most of our songs, even though they're grime, were just really heartfelt," says Dirty, trying to fathom where that tendency came from, now he's a relaxed, balanced adult. "Times must have been really hard."

It's not the only track that refutes the myth that grime production is aggressive, boisterous, or cluttered. Your Love Feels has a sinister bassline and catchy cymbal-swoosh, but these elements are only there to support the main event: heartrending vocal samples deliriously mangled into an emotional soup. Using FruityLoops the group would chop up rock and classical hooks, draw on film soundtracks such as Rocky, or pop-plundering hip-hop producers such as Dipset and Just Blaze – and on the sublime Together, even make deft use of the Police's Message in a Bottle. Unlike the tongue-in-cheek cheese-sampling mania of some dance music and hip-hop, Ruff Sqwad's chipmunked vocal samples were always executed with the brutal sincerity of adolescents. There are no knowing winks here, and it sounds all the better for it – their reworking of Cutting Crew's Died In Your Arms Tonight makes you feel like somebody has actually just done so; not like it's karaoke night in the Dog and Duck.

"A lot of people think grime is one thing, but something like Died In Your Arms is basically a love song," Dirty says. Like Together, it's a song whose vocal version would have been a Top-10 hit if there was any justice in the world – had it not been tucked away away on a semi-official mix CD. I remind them of the first time Ruff Sqwad played the Died In Your Arms instrumental on the radio: as soon as the whomping drum claps come in, whoever was holding the mic at that point exclaimed: "Clap your hands!"

Rapid chuckles. "That was what we were imagining, some stadium-rock thing; all these people clapping." This unabashed teenage dreaming goes some way to explaining the extraordinary grandeur of other long-lost instrumental classics such as Anna and Lethal Injection. The former's trumpet volleys seem to herald the onset of a great empire from days of old; while the latter's crushing sci-fi synths describe the first great empire in space (and give a clue where Hudson Mohawke got his best ideas).

Ruff Sqwad are still making music together, when Tinchy's schedule allows – mostly singles in the vein of January's lighthearted Mario Balotelli – and a long-awaited third mix CD may yet materialise; but they're fully aware "the game has changed". And as to where their astounding vision came from? Dirty thinks back. "Our minds were so wide open at the time," he says wistfully, "so ambitious – that's how we felt."

• White Label Classics is released on 10 December on No Hats No Hoods