A handful of people are staring into a future that never came to pass. Holding gaming handsets connected to a row of five Apple Macs, they wander virtually through Manchester’s dazzling “entertainment district”, to an area close to its main railway station where two elevated highways carry speeding traffic over hulking modernist buildings.

The overall effect is somewhere between Grand Theft Auto and Minecraft, with one key twist: back in the 1960s, these gleaming environments were not the stuff of fantasy, but everyday urban planning. Over the next 10 days, Manchester will be exploring its past in the annual Histories festival, taking in everything from the local wanderings of Karl Marx and Friedrich Engels to the lingering aftershocks of the Sex Pistols’ legendary 1976 gigs in the city.

Piccadilly Entertainment District, a 1967 proposal by the City Planning Department.

It all attests to the richness of Mancunian history – but the exhibition I am watching take shape might be the most fascinating thing of all. Making Post-war Manchester: Visions of an Unmade City brings to life long-forgotten plans for the city’s reinvention: a riot of moving pavements, monorails and rooftop heliports.

Imagine the difference between 1946 and 1961 – the computer had been invented, atomic energy, mass car ownership, TV Richard Brook

Richard Brook is principal lecturer at the Manchester School of Architecture; Martin Dodge does his work in the geography department at Manchester University. Sitting down to talk through their show, conversation is full of forensic expertise – and wide-eyed enthusiasm. “I admire the chutzpah,” says Dodge. “Today, urban development lacks ambition. But you look at some of the stuff from the 1960s, and you think: ‘Even if it didn’t work, these people were really going to do something, weren’t they?’ There was massive ambition there.”

The plot starts in 1945, when proposals to rebuild a bomb-damaged Manchester were drawn up by the city’s corporation, forerunner of the modern city council. Ambitions were so titanic they even included the demolition of the city’s celebrated Victorian town hall. But postwar austerity and stringent building regulations put everything on hold – until 1961, when central government belatedly approved the plan ... with drastic updates.

A model of the city by Manchester City Council’s planning department on public display in 1965. Photograph: Image courtesy Robert Maund

“Imagine the difference, socially and culturally, between 1945 and the early 1960s,” says Brook. “The computer had been invented, atomic energy had come on stream, there was mass car ownership, and TV had really got going. Huge social change.” The plans that came out of the office run of Manchester’s city planner – one John Miller – reflected this tumult, and the utopianism that Labour prime minister Harold Wilson saw in “the white heat of new technology”.

The city centre was set for a complete rebuild, based on ideas that in retrospect suggest a kind of giganticist kitsch – but Brook and Dodge say the thinking was amazingly prescient. The planners had a forward-looking idea of the city’s “education economy”, admirable ambitions for public transport and pedestrianised areas, and a belief in something most cities now take for granted: that the the urban environment is a set of connected zones, eachserving a cultural or economic purpose.

An unbuilt scheme for Manchester Central station recreated virtually by architecture students. Photograph: Manchester School of Architecture

You've got people saying: We had good intentions. History's been rewritten. I wanted to make the world a better place Martin Dodge

Some of the plans were realised – in the shopping zone around Market Street and the Arndale Centre, and the modernist architecture of the universities district, much of which is now disappearing. But when the Opec oil shock of 1973 tipped the global economy into crisis and the British reorganisation of local government spelled the end of the old planners’ departments, most of the grand plans began to gather dust.

By the end of the 1970s, the dream was pretty much dead. There would be no monorail linking Manchester Airport to Langley, on the city’s northern edge, no moving pavements to carry people along Oxford Road and out of the station; the urban skyway that would ferry cars to the dizzy heights of the nearby Piccadilly Plaza would never be built.

Highways for cars, skyways for pedestrians.

When Brook and Dodge began researching all this, they discovered the relevant documents were surprisingly hard to come by. “Very little survives,” says Brook. A couple of years ago,he visited a retired architect in the seaside town of Lytham St Annes about another project, only to find he’d once worked in Manchester’s planning office and actually had the original drawings under his bed. Brook duly copied them, and added them to the ever-expanding collection that his clever masters students have turned into virtual environments for this show.

At least in the 60s there was a grand vision

“A lot of the people who worked on the plans are still around and keen to tell their story,” says Dodge. “Some of them feel they’ve been misrepresented, in all the received opinion about architectural carbuncles, and everything being the fault of the planners. You’ve got people saying: ‘Look – we had good intentions. History’s been rewritten: I was a good planner, and I wanted to make the world a better place.’”

Much of that loathing of postwar architecture and planning, of course, lingers on. I wonder – given the persistent belief that Britain once teetered on the brink of some Soviet-esque urban nightmare – what is it about such a maligned period that impresses these two enthusiasts? Brook cracks a smile. “Well, I’m a bit of a concrete fetishist. And I like rare groove things: things other people dislike almost instantly. I appreciate why some people might find them ugly.”

‘Piecemeal development’ … today’s thrusting skyline. Photograph: Christopher Thomond/The Guardian

What about the common feeling that these lofty modernist visions often turned out to be oppressive and inhuman; that they could lead to the kind of disasters from which many cities – Birmingham for example – had to escape?

“But you could say the same thing about the piecemeal development going on in London and Manchester now,” Dodge insists. “At least in the 60s there was a strategic, grand vision. Now, it’s just raw capitalism and gangster development: if someone can develop a site, they will.” He thinks for a moment, and casts his eyes towards the row of computers, and their simulations of a 20th century that never happened. “They wanted a better city,” he says.

• Making Post-war Manchester: Visions of an Unmade City is at Manchester Technology Centre until 24 June, as part of Manchester Histories festival