Michael Stipe, 33, is the lead singer with the multi-million-selling rock band REM, which formed in Athens, Georgia, in 1980. He is also executive producer of Todd Haynes' glam-rock film, Velvet Goldmine. REM's new album, Up, was released last month and is at number two in the album charts. Natalie Merchant, 35, is the former vocalist of the New York-based band 10,000 Maniacs. Her erudite debut solo album, Tigerlily, sold more than four million copies in America alone. Her newly released second album, Ophelia, is accompanied by a short film in which she plays seven of the characters from the songs. To "stay connected", she continues to do regular voluntary work with the homeless.

MICHAEL STIPE: I knew of Natalie before I met her. In Athens, Georgia, where I live, everybody was talking about this girl who danced like a whirling dervish and sang in a band called 10,000 Maniacs. I went to see them perform in this tiny, packed club in 1983 and we met shortly after that.

Our first meeting was controversial - it's become something of a legend. I'm incredibly shy and it was at a horrible party. Apparently, I handed her a paper bag, then wandered into the bathroom. I escaped through the window, but eventually I had to come back because Natalie had my bag. She was probably a little frightened to meet me, but that wouldn't have occurred to me back then.

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The next time I saw her was in Buffalo, New York. I was surprised and really pleased to see her. Even at the beginning of our friendship, I remember thinking that Natalie possessed rare knowledge. If there are 12 ways of looking at something, Natalie will always find a 13th.

Natalie was really the reason my work became politicised in the late Eighties. The work she was doing was real and important - all about the human condition. It was a very accurate reflection of the power and greed of the time, and I was impressed by her understanding. Through our conversations, I got to thinking that the plight of the native American Indians was a very important issue.

I've always placed great value on our shared experiences. There's this idea that entertainers are this rarefied breed who never have to grow up. That's not true of Natalie and me, but I do think we've retained a childlike sense of wonder about the world. I remember being in New Orleans with her one time. We had bought a fake tattoo of this ridiculous giant fish and it was so big that Natalie put on one half and I put on the other. We went stomping around New Orleans and, typically, Natalie knew more about the city than I did - I had no idea how or why. I remember talking on some steps, and Natalie pointing out some fellows who had real tattoos. That scared her for some reason.

I've always been jealous of Natalie's ability to draw. She keeps journals and carries sketchbooks around with her. I'm very scattered with my ideas, whereas she's very thorough and methodical. Natalie's also got a really wicked sense of humour. In the press she's often portrayed as a bit of a saddo - this flighty, hippy girl who preaches from on high. I think she's been pigeonholed as a certain kind of female performer, but she's very smart and funny and doesn't need to prove herself to anybody.

There was an interview that she gave for Us magazine recently, and the journalist was trying to make it more snarky - "snarky" being a term that was coined in the offices of Entertainment Weekly to describe interviews full of gossip and slamming of other people. So the journalist was being smug and mean- spirited, while Natalie was saying these amazing things, trying to explain why she didn't want to waste the platform her album has given her by being cynical and ironic. That struck a chord with me. Natalie can articulate and condense ideas that I've had but haven't been able to vocalise.

I think the reason our friendship has endured is quite simple - we like each other a lot. Someone once said that when you see a person after a long time and you're instantly transported back to the last time you were together, then that's how you know a true friend. That's how it is with us. We have privileged positions but we've also had to contend with things that most people don't: how do you present yourself publicly and deal with it when that's handled unfairly? How do you maintain your humour and not allow the uglier side of your public persona to creep into your real life? I'm really proud that we've managed to hold on to the essence of our friendship. What that essence is, I can't pinpoint for you, but it's a great thing.

NATALIE MERCHANT: I met Michael 15 years ago in Atlanta, Georgia, around the time that REM's Reckoning album came out. They were playing a benefit for an environmental group in a small club. REM excited me because they made this sound that was distinctly American, yet wasn't urban. Their music had a Southern quality in the same way that William Faulkner or Truman Capote have, and, like 10,000 Maniacs, they had this scene growing around them in the countryside. I felt a kinship. I also thought Michael was really sexy and I had a crush on him. I drove 500 miles to meet him on my day off. In my head it was supposed to be this epic summit, but it was horrible and I decided I hated him.

Michael is very charismatic and he'll always have a circle of people at least three deep around him. Later, I came to refer to this as "the 12-headed monster". I met him at the after-show party and he was kind of cagey with me. He wasn't that famous at the time, but being as shy and as young as I was, it was a real big step for me to seek out another musician. He handed me a paper bag, said "Can you hold this for me?", then wandered off to the bathroom for about 45 minutes. I remember waiting outside like an obedient puppy, and the longer I sat there the more furious and embarrassed I became. He was just hiding because he needed some space but I took it personally. When he came back I gave him the bag and left in a huff.

Our second meeting was much better. REM were playing in Buffalo, New York, about 100 miles from where the Maniacs and I lived. Our bands shared the same promoter, so I knew they were playing and I turned up at the sound-check. At that time I was into vintage clothing and I was quite a quirky little girl. I'd brought my juggling balls and I was wearing a pair of Victorian bloomers and a pyjama top. Michael was wearing his pyjamas that day, so we made a pretty funny-looking couple when we went to this vegetarian restaurant. We talked about music and had a great time. I was doing a lot of research about the genocide against the native American Indians, and we made a pact that we'd both write songs about their plight. Michael wrote "Green Grow The Rushes" and I wrote "Among The Americans". Both songs appeared on our next records. I look at that as the beginning of our friendship.

On stage that night Michael seemed to be channelling some really powerful energy through his body. When he's having an on-night it can be like watching a shamanistic ritual. There was less hype about REM then and they were young and on fire. After that meeting in Buffalo I went home on a high. I felt that Michael had began to understand why I'd sought him out, and he must have thought I was pretty cute, because we went on to become lovers.

REM were instrumental in securing industry interest for 10,000 Maniacs, and they were also great for guidance. I remember Michael saying, "Don't sell your publishing, Natalie, it's your virginity. Never give it up." I wasn't sure about the metaphor but it made me think. To this day I still own all my publishing so that nobody can use my songs without my signature.

I admire Michael's sovereignty and originality as an artist. He's a photographer, poet and painter as well as a singer, and he's always encouraging other young artists. I admire the strong bond he has with his parents and sister and that's obviously been important for him. He also has very long friendships. Most of the people who were in our circle 15 years ago are still in it, and even though I don't see Michael that often, when we do meet there's that feeling of closeness. There are maybe six people in my life who I could say that about.

We know each other pretty well - as former lovers there's a certain shared knowledge you can't unlearn. Michael thinks I read a lot more than I do, though, and he thinks I'm a better musician than I actually am. If I sit down at the piano he's like, "Oh my God! Liberace's in the room!" I'm a very passionate player but technically I'm no good at all. I've always thought it would be interesting to see what kind of music Michael would come up with if he learnt an instrument. I've been encouraging him to do that ever since we met, but his interests lie elsewhere. His life is fast-paced and there's a lot of it I'm not clued in to. He can spend weeks on end going to parties in Los Angeles. I abhor LA - that's a major difference.

If Michael sees a piece of art or hears a piece of music that inspires him, he has to meet the person behind it - and he does. I envy him that: he learns so much from these people and I'd like to as well. He's good friends with Radiohead, for example, and I'm dying to sing with Thom Yorke, but too terrified to meet him. Michael will say, "I'll give him a call right now," and I'll go, "No, put the phone down." I'm the flower that Michael peels off the wall to introduce to people. It's a good friendship to have, and I hope I have it for the rest of my life. !