They took two knucklebones from a yak and put them at the temples of a man called Lungshar. They were bound in place with a tourniquet, which was tightened until his eyeballs popped out. That was the theory, at any rate. But this was the ancient Tibetan punishment of blinding and it had been outlawed by the 13th Dalai Lama, so no one was quite sure how to do it. The executioners proceeded on oral accounts handed down from those who had seen the penalty exacted in a previous age. They didn't get it quite right and one of the eyes had to be gouged out with a knife before the sockets were cauterised with boiling oil.

It may have been an antique penalty, but poor old Lungshar's punishment was meted out only a little over 70 years ago, in the run-up to the selection of the present Dalai Lama, the man believed by many to be the 14th reincarnation of each of the previous 13 Dalai Lamas. Lunghsar was one of the group of politicians jockeying to dominate the regency of between 10 to 20 years, which occurs whenever a Dalai Lama – the spiritual leader of Tibetan Buddhism and for centuries the temporal ruler of Tibet, and now leader of its government-in-exile – dies and a young child is named as his reincarnation. Lunghsar was the one who lost the power struggle. The top knot of his hair was undone, in symbolic humiliation, and the gruesome penalty exacted. He lived for a year afterwards.

There is more to this than a piece of grim history. For it is but one of countless examples of the sheer strangeness of the world from which the Dalai Lama emerges. It is part of what fires our romantic imagination about the jet-setting religious leader so beloved of Hollywood celebrities, who can fill 50,000-seat rock-star venues and whose speeches are played on the dance floors of London clubs, yet who is also a feudal monarch, a God-King, and the reincarnated Living Buddha.

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There are other reasons, too, why he has become one of the most revered religious leaders of our age. His high-profile visit to Britain next week – during which he will meet the Prime Minister at Lambeth Palace on Friday – will provide further evidence of his extraordinary ability to attract Western support for his cause (see pages 8-9). Notably, though, that meeting with Mr Brown won't be at Number 10, a decision no doubt influenced by political considerations. Which begs the question: can the Dalai Lama ever succeed in his mission to free Tibet from a Beijing regime determined to destroy its character and absorb the country into the homogeneity that is the People's Republic of China?

Buddhism is now the fastest-growing Eastern religion in the West. Movie stars such as Richard Gere travel three times a year to the Dalai Lama's exile home in Dharamsala in northern India to sit in on the classes he gives there to followers. What he offers, according to Pico Iyer, author of The Open Road, a study of the Dalai Lama over the past 30 years, is a "trans-Buddhist philosophy of kindness and responsibility", which strikes a chord in a Western world uncertain about its own religious heritage but thirsty to find meaning in an increasingly materialist culture.

The Dalai Lama, a contradictory figure far from the "simple monk" of his own definition, has transformed a complex Buddhist metaphysic into sound bites. Kindness, he says, helps the person who gives it. Anger works against the person who feels it. Violence breeds violence. And the quality of means determine ends. Such Buddhism is unthreatening to those brought up in a secular culture uneasy with the dogmas and duties of Judaism, Christianity or Islam. Buddhism chimes well with a contemporary sense that there is no meaning to the universe beyond that which we confer on it.

Then there is the attraction of the Dalai Lama's own character. "He is genuinely gentle and humble," said one of his Western followers. "He really seems like a man in whom ego has been shrunk. People feel humbled when they meet him." All that is reinforced by the man's love of gardening, his doting on his Alsatian dog, and the gentle pragmatism of giving up being a vegetarian after falling ill with hepatitis B. His legendary laugh and genial twinkle help him reach across boundaries – as does his globetrotting, which saw him tour 11 countries last year. Not much notice is taken of his condemnatory views on homosexuality and divorce, nor his gentle insistence to foreigners that they should study their own religious traditions rather than seize upon a Buddhism they have not fully understood. "If you can't make Christianity work you need to look into yourself to find out why," he once told a Western enthusiast for things of the East.

To really understand the extraordinary draw of the Dalai Lama, one must understand his background. This is the man who was born in a cowshed, the fifth of 16 children, in a small and poor mountain settlement in the remote Tibetan province of Amdo. Yet one day, before he was even three, a party of monks journeyed to his home, having been led there by the arcs of rainbows. They had been sent out by the Tibetan government to find the new incarnation of the 13th Dalai Lama, Thupten Gyatso, who had died in 1933. They had travelled to the north-east because the head of the dead Dalai Lama had mysteriously turned in that direction as his embalmed body was lying in state, indicating the region where he would take rebirth. A senior monk had dreamt of a house with strange guttering near a three-storeyed monastery with a turquoise and gold roof.

When they found the place, they entered to find a toddler named Lhamo Thondup. The monks' leader, who was pretending to be their servant, spent the evening playing with the child. Lhamo was offered a number of items which had belonged to the 13th Dalai Lama, along with several similar items that did not. In every case, the infant chose the correct objects, announcing: "It's mine. It's mine." Most striking was that he lingered over, but ultimately rejected, a walking stick which had once belonged to his illustrious predecessor but which the 13th Dalai Lama had given away. The 14th Dalai Lama – the reincarnation of the Bodhisattva of Compassion – had been found.

But that was only the beginning. At the age of four, renamed Tenzin Gyatso, he was taken to the cold dark Potala Palace in Lhasa, from which he wistfully watched the ordinary children of the capital playing in the streets below. There he was put through an intense religious training, which concluded with an oral exam before 20,000 monks in March 1949. It was also where he was schooled in the hard lessons of international politics: that month Tibet was invaded by an army of Chinese Communists, who stated their intention to liberate this strategic and resource-rich area, almost the size of Western Europe, from the hands of imperialist aggressors – whatever that might mean. '

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For almost eight years the new young leader negotiated with Mao Tse Tung's invaders, seeking to find a workable compromise. At first there was a honeymoon period, in which the young man several times was invited to meet Chairman Mao, who – according to Alexander Norman's new study of the lives of the Dalai Lamas, Holder of the White Lotus – mistook the young man's enthusiasm for modernity for a rejection of his faith, and offered the friendly advice that "religion is poison". Even so, the Dalai Lama acquiesced in a Chinese 17-point agreement legitimising Tibet's incorporation into China, while guaranteeing no change to Tibet's political, cultural and religious institutions.

But the smooth words were accompanied by continuing violence against Buddhist monasteries and civilians. More than a million Tibetans – a sixth of the population – died during the 30 years following the Chinese occupation. In March 1959 Tibetans took to the streets demanding an end toChinese rule. Faced with the choice of kow-towing to the Chinese or joining a popular uprising in which many more would die, the Dalai Lama fled in secret through the snow-covered passes of the world's highest mountain range to the Indian hill station of Dharamsala. Though the Indian authorities were alarmed by the 80,000 other Tibetans who followed him, the rest of the world was captivated.

Such was the stuff of romantic fable. Yet there is also something deeply modern about the man and his story. It is there in his philosophy, in his politics and, sadly, in the persecution which is the continuing fate of his people.

Back home the Chinese crushed the 1959 revolt and thousands of protesters were killed. In the years that followed the Dalai Lama ceaselessly campaigned for a non-violent solution. Yet Tibet largely fell from the international spotlight. As recently as the early-1980s, according to Iyer, the Tibetan leader's New York press conferences attracted barely a handful of people. But then, in 1987, the Tibetans again rose up against Chinese occupation, and this time foreign observers were present and the world began to pay heed. It also noticed how, in the face of violence and repression, this exiled leader spoke always and only for tolerance and dialogue. Within two years he had won the Nobel Peace Prize.

In his acceptance speech, he quoted Ghandi as his spiritual hero. "I speak without a feeling of anger towards those who are responsible for the immense suffering of our people and destruction of our land, home and culture," he said. "They too are human beings who... deserve our compassion."

It was only then that the world began to perceive the Dalai Lama's complexity. True, he had been educated in Buddhist metaphysics, epistemology, logic and Sanskrit. But from early on he was attuned to Western culture. As a boy he was fascinated by things he found among the belongings of his predecessors in his vast 1,000-roomed palace – a telescope, a cine-camera and illustrated books in English. He took apart watches and put them back together. He invited scientists and philosophers to his home to give him personal seminars.

The journey from Tibet to India was a journey from the medieval to the modern. The Dalai Lama drew up a constitution for the Tibetan government-in-exile which brought his people democracy for the first time in their history; he even provided a clause allowing for his own impeachment. In his monasteries, monks began to learn modern science. Women could study for doctoral degrees. Children are educated in Tibetan to the age of 10 and thereafter in English. Over the past 30 years the Dalai Lama has tried to blend the best of old Tibet with the best of the 20th-century West.

Not everyone is convinced: there are young radicals among Tibetan Buddhists who have become impatient with his line of compassion to all people, including the Chinese invaders. Though he has accused them of committing "cultural genocide", it has borne no fruit, they argue, over five decades. His "middle way" of Tibet as part of the People's Republic, but designated a "zone of peace" – with self-rule and an end to the mass movement of Han Chinese migrants into the area to swamp the native population – has been rejected by Beijing. Instead China has cracked down more thoroughly. Tibetans are saying more frequently that they can wait no longer: that this is the moment for a decisive act of defiance.

The Dalai Lama has been uncharacteristically firm in response: in the long term, dialogue is the only way, and any solution not owned by the Chinese is no solution at all. When Tibetans turned to violent protest in Lhasa in March (though nowhere near as violent as the Chinese security forces) the Dalai Lama threatened to resign if violence worsened. The angry young men who set fire to Chinese businesses in Lhasa may continue to ignore him, but the majority of Tibetans are cowed by this robust expression of authority; nobody challenged him on how an incarnation could resign.

Instead he has used the Olympic flame's progress across the world to persuade the international community to press the Chinese to re-open negotiations. The first steps in a complex diplomatic gavotte have begun. He has no illusions: a whole series of envoys to Beijing over the past 50 years have produced nothing. Talks between the two sides broke down in 1993 and there was no dialogue for nearly a decade.

Earlier this month the two sides met in the Chinese city of Shenzhen, yet Beijing has not abandoned its fiery rhetoric: it calls him "a wolf in monk's clothing". The Chinese doubt his good faith, believing that though he insists he does not want independence for Tibet, that is his real agenda. They resent his campaign ahead of the Olympics, saying he is trying to undermine the Games, divide China and hold back its rise as a world power so "the country and people forever remain poor and weak". The two sides have agreed to meet again, but with the Chinese caveat that the Dalai Lama must "show sincerity, particularly in his actions" for the negotiations to continue.

These are the faultlines which provoke ambivalence to the Dalai Lama among Western politicians. It is why Gordon Brown has been so reluctant to meet him. It is one thing to bask in the glow of the Dalai Lama's presence; it is quite another to irritate the world's emerging superpower.

Yet paradox seems not to trouble Tenzin Gyatso. This is, after all, the man who claims to be addicted to newspapers, magazines and the BBC World Service, yet who rises at 4am to spend the first four hours of every day in silent meditation. He is a religious leader who warns against being needlessly distracted by religion. He represents one of the world's most underdeveloped and isolated countries, yet is a champion of globalism. He is a man who is assailed from one side for being too expedient, and on the other for being too idealistic. He is a man who, all his life, has tried to bring the ideal and the possible together and make from them a new reality. No wonder everyone loves him – apart from the politicians.

The Chinese think a waiting game will see him off. After all, when the Dalai Lama dies – he is now 72 – the monks will set off in search of his reincarnation. The child they find will need long years of schooling during a regency that will give Beijing chances aplenty for mischief-making. Tenzin Gyatso has a simple response: a 15th Dalai Lama, he says, will necessarily advance the programme of the 14th Dalai Lama.

It will be a long game indeed.

Rolling with Team Lama

Joshua Dugdale is the director of The Unwinking Gaze, the first fly-on-the-wall documentary to detail the day-to-day life of the Dalai Lama. Dugdale and his crew have been given unprecedented access to the Tibetan leader and his entourage since 2004

The Dalai Lama gets up at 4am. He'll have tea when he gets up, then breakfast after his meditation, which lasts for two to four hours. Breakfast – usually toast, butter, jam and orange juice – must be on the table at the right time. While he eats he may read The Times of India and the International Herald Tribune.

I don't think the Dalai Lama has many close friends. He may have things in common with other monks, but he's still their boss. He has an enormous capacity for empathy and loves to laugh, but among his own entourage, you see his more serious side.

His offices are based in the palace complex in Dharamsala in India; his own private office is next to the plush ante-room where he receives guests, and is quite old-fashioned: a desk, with no computer, just a blotter and some pens. But his team have computers, faxes, printers, the internet. There are about half a dozen in this inner circle, including Tenzin Namdak Taklha, the Dalai Lama's Lord Chamberlain figure.

The private office does its best to protect the Dalai Lama. But it isn't the slickest operation, and has been accused of naivety.

All the Dalai Lama's attendants are in awe of him. They see to his everyday needs – serving meals, giving and accepting gifts and so on. Tibetans come from across the Himalayas to see him so they can have a better rebirth in their next life.

When the Dalai Lama goes on tour, it's relentless, meeting after meeting, arena after arena. But he is very undemanding. When I was with him on a trip to Liverpool, he stayed in a budget hotel, but never complained. For a long trip, the entourage might be a dozen-strong, plus security; for shorter trips, perhaps only four or five – and his brother Tenzin Choegyal and the Special Envoy, Lodi Gyari, also accompany him.

Gyari has been in the West for a long time, but used to be the head of the Tibetan Youth Congress, which is the independence-seeking organisation that the Chinese accuse of paramilitary activities. He's a controversial figure, but well respected in Washington, where he is based. He acts as a gateway between the Dalai Lama and Tibet's American supporters, and the Dalai Lama takes his advice on most global political issues, such as whether he should go to the Beijing Olympics.

The Prime Minister of the government in exile, Samdhong Rimpoche, is possibly a little more deferential to the Dalai Lama than he should be; it's awkward to have your spiritual mentor as your boss on a political level, too. He's a good administrator, but finds negotiating with the Chinese quite a challenge. It's a big step up from running the education system, his previous job. He has only sporadic contact with the Dalai Lama. They don't meet every day. The Dalai Lama is very hands-off – he wants to leave the politics to others. He just steps in when he's needed, although his word is final.

Interview by Tim Walker

'The Unwinking Gaze' (www.theunwinkinggaze. com) is out on 30 May. You can watch clips from the film at independent.co.uk/newreview