It seems bizarre today, at this time when club-born bands like The Prodigy or The Chemical Brothers regularly headline the Glastonbury festival, huge electronic dance music (EDM) events like Las Vegas’s Electric Daisy Carnival dwarf the biggest rock shows and the world vibrates to the ecstatic sound of drum machines and synthesised bass lines.

But there was a time when electronic music was a marginal affair to mainstream music fans, an impenetrable world with no charismatic front men nor any nuance beyond exhortations to let yourself go and feel the music.

More open-minded bands like Primal Scream, Jesus Jones and Orbital did blur the lines of rock, electronics and live performance in the early days. But the group that perhaps most completely fused the two sides of post-electronic pop – introducing rock fans to the euphoria of communal dancing, and winning over clubbers to the deeper, richer pleasures of the full-length album – was Essex-based Underworld.

This week they mark the 20th anniversary of their groundbreaking album Dubnobasswithmyheadman, a sprawling and hypnotic work which gave rock fans an entry point to the new churning rhythms of dance music. There will be the sort of celebrations usually reserved for a classic rock opus, with a lavish five-disc remastered CD and Blu-ray edition of the record featuring unreleased material, plus a show at London’s Royal Festival Hall on Saturday 11 October at which Underworld will perform the album in full for the first time. They will tour the ‘Dubnobass’ album across the UK, France, Germany and the Netherlands in 2015.

‘Relentless energy’

The response has been so warm because Dubnobass is possibly the best-remembered album from British dance music’s first golden period. On its release in January 1994 the weekly music paper Melody Maker pronounced Dubnobass to be “the most important album since The Stone Roses and the best since Screamadelica by Primal Scream. “We’re grabbing elements from all different times and areas of music and taking them somewhere else,” singer-guitarist Karl Hyde told the paper at the time. “Even though we’re using vocals and guitars, we’re trying to do it in new ways. We’re trying to make those elements relevant today.”

Key to the record’s appeal was Hyde’s mysterious, impressionistic vocal presence. A former art student trained in the Fluxus school, Hyde made notes of fractured city imagery in little notebooks during his wanderings around London and New York and Tokyo. From these he sang fascinating, whispered lines:  “Ride the sainted rhythms on the midnight train to Romford,” “Mmm, skyscraper I love you” – that turned Underworld’s mix of stampeding dance floor beats and strange ambient lacunae into a puzzle to be decoded.

Dubnobass became a Joycean cut-up of the modern city, full of images of seedy Manhattan, drunks at Liverpool Street Station and visions of surreal architecture, the post-Big Bang city transforming into the 24-hour society of the 21st Century. Its cover artwork – layers of typography distorted by the art and advertising collective Tomato, for whom Underworld provided music and ideas  echoed the music’s textures, prefiguring the word clouds and data visualisations of the emerging internet age.

Though Dubnobass summoned up dance music’s relentless energy, clubbers also embraced it as a reflective record to play in the small hours after you came home. Here was a dance record with something to say about the world that was changing around it. “The lyrics are all snapshots of what really happened to me,” Hyde recalls. “We wanted to capture as much of the world as we could and put it on record.”

‘Outsider culture’

Yet the album that captured that changing world so vividly was actually a final throw of the dice from artists who’d worked in music for over a decade with little reward. Friends since their days in college punk bands in Cardiff in the early ‘80s, Hyde and producer Rick Smith had reached a low ebb in the end of the decade. Their extravagant and expensive-to-run band – a funk-rock outfit big on adventurous haircuts which was the first to use the Underworld name – had petered out, leaving the duo with only debts. But Hyde and Smith had become intrigued by the new rhythms and DIY approach of dance music’s emerging world.

During sound checks on Underworld mark one’s soul-sapping live tours, Smith would play their 909 drum machine – then providing the trademark beat of house music – on its own, without accompaniment, through giant stadium speakers and marvel at its power and simplicity. Why can’t we make music like this, he wondered? As the band wound down, the two began to doodle with simpler, mostly instrumental ‘transitional’ music inspired by Chicago house and Detroit techno, never really expecting it to be released. The group’s demise was almost a release. “By the end we’d given up on being a band,” Hyde admits. “We wanted to be almost anything else.”

After Underworld mark one dissolved, Hyde filled his time with session work for Prince in Minneapolis, and Blondie’s Debbie Harry in New York. He filled his notebooks with observations and imagery. Back home in Romford in London’s anonymous outer suburbs, producer Smith began to experiment with the few pieces of lo-fi equipment they had retained. In contrast to the dead path of conventional rock stardom, the new, parallel world of warehouse raves, independent record shops and affordable technology seemed full of possibilities.

“Rave was more punk than punk,” explains Karl Hyde. “Ten thousand people in a warehouse, making records in your bedroom, pirate radio… you could have a career entirely outside the conventional music business. It was absolute outsider culture.”

Fascinated, Smith hooked up with a sparky young DJ from nearby Hornchurch called Darren Emerson. A trainee futures trader in the City’s financial markets by day, at night Emerson played techno at the Milk Bar in Soho where stars of the emerging dance music scene including Paul Oakenfold and Björk would gather. Keen to learn about production, Emerson was initially unimpressed by Smith’s works in progress but the two soon began to gel. “It took me a long time to assimilate the rules of dance music from Darren until I felt ready to break them,” says Smith. “I had no confidence yet. Working with Darren helped me develop it.” And to Hyde’s surprise, Emerson encouraged him to do what he thought he’d left behind: sing, and play guitar.

The trio adopted new methods of working. They would record a track, let Emerson road-test it with the Milk Bar crowd, and then revise it until it reached its optimum. This could be confusing. When the three were out clubbing one night Hyde heard an amazing house track with a searing guitar riff, an utterly new sound. This is it, he told Smith, this is what we should be doing. “Karl,” his friend replied, “This is us.”  (The track was Dirty Guitar, which appears on the Dubnobass reissue).

With their first release – a 12-inch called The Hump which they sold to the specialist dance shops out of the back of an old Sierra estate car – the new Underworld turned the first profit they had ever seen from music. “It showed that this could work,” Hyde recalls. “The route of going cap in hand to a major label for an advance, and then losing control of what we were doing, was obsolete. We could do it ourselves.”

A further run of club hit 12-inch singles – Mmm… Skyscraper I Love You, Rez, Dark And Long – culminated in Dubnobasswithmyheadman, which announced Underworld as a new kind of band. Their influence grew after a commercial breakthrough when the raucous track Born Slippy Nuxx accompanied a key scene in the movie Trainspotting.

New generations of dance music artists (Basement Jaxx, Daft Punk) would follow Underworld’s lead in constructing epic live shows. U2 borrowed their programmed textures for their Pop album. Radiohead took inspiration from Underworld to delve deeper into electronica for their transformative Kid A and Amnesiac albums.

But there remains something undeniably special about the Dubnobass tracks, all recorded on simple kit in a semi-detached house in suburban Romford. When Trainspotting director Danny Boyle asked Smith and Hyde to provide music for the London 2012 Olympics opening ceremony, they selected some of Dubnobass alongside songs by Arctic Monkeys, David Bowie and Emeli Sandé. These pieces of handmade electronica were finally heard by millions of people around the world. Something in them still resonates.

“Dubnobass still sounds alive and pertinent,” says Karl Hyde, “because it’s got struggle to it. It’s got the forming of a group that doesn’t know what it is yet, and it’s got hope in the darkness too. Positivity in the face of adversity.”

If you would like to comment on this story or anything else you have seen on BBC Culture, head over to our Facebook page or message us on Twitter.