It's 20 years since the Ayatollahs deposed his father and exiled his family from Iran, but His Imperial Majesty Reza Shah II, now living in Washington, is still hopeful of a brighter future

His Imperial Majesty Reza Shah II, heir to the Peacock Throne of Iran, is not what you come to expect from royalty. He's perfectly charming and polite. Perfectly. He is also approaching 40, but looks younger, especially in his professionally cut brown suit, crisp shirt and Gucci tie. Yet his clothes, while smart and expensive, are not nearly as scarcely wearable as those worn during the era of his late father, the Shah of Iran, the ''Shadow of God on Earth'' - glamorous, extravagant and, ultimately, tasteless.

His royal skin is smooth and bronzed, while his coiffed hair is peppered slightly with grey. The heir de jure wears the smile of his mother, the former Empress Farah Dibah. And he smiles a lot, disregarding the fact that the mark of power is invariably an impassive expression. He speaks with an authority greater than his years. Far away from the gilded palaces of Iran, the dazzling clothes and the lavish parties, royal life, it seems, is stirring.

We meet at the headquarters of the Mihan Foundation, in the curiously named Democracy Centre, in Bethesda, a suburb of Washington DC, home to his new Mihan initiative (''mihan'' means homeland), which aims to restore Iran's image and to promote within Iran the virtues of a civil society based on the protection of fundamental individual rights. Several requests to meet at his family home were turned down due to ''security reasons'' and a desire to ''keep His Majesty's personal life away from public scrutiny''. It is a reasonable excuse, I muse. Pahlavi has travelled with a bodyguard ever since 1979 when he was condemned by an Islamic court, along with his family, for ''waging war against Allah''.

So we sit down in a small but plush room of the Foundation offices. Beige couch, blue carpet, pine table, oil paintings by Iranian artists and a smattering of modern furnishings. There is no throne. It's a warm and crisp October morning. Half an hour earlier I was given an excellent history lesson on Iran by my Ethiopian taxi-driver who, I'm sure, drove me round the same streets a few times just to finish his lecture. ''He would be better for the country than Khatami,'' said the mobile professor, before looking at me like a fat man looking at food. ''$56, please.''

Politely, His Majesty enquires about Scotland before telling me that he visited the country as a young boy while on an official visit. Bored with state engagements, he was taken to a Celtic and Rangers match. He cannot remember who won, but recalls one ecstatic fan pulling a hip flask of whisky from his pocket, taking a drink and then offering it to the young heir. ''I declined, of course,'' he says, smiling.

We get down to the business at hand. The hardest questions, says Pahlavi, are posed by children. In this particular case, his American-born daughter Noor, now seven. Fed up

with her father's constant unhappiness over his forced exile from his homeland following the 1979 revolution, she asked him: ''If Iran is so important to you, then how come we're not living there?''

He was stumped for an answer. ''It's rather difficult to try to explain to a child that if Iran is such a great place then what are we doing living in America?''

It is a question that has caused him many sleepless nights. How would he paint a picture of Iran as a beautiful country, full of wonderful people, and tell her he was unwelcome there? How would he explain that she and her younger sister Iman, aged six, and their mother Princess Yasmine Etemad-Amini, were also unwelcome? Pahlavi has asked himself that question for the last 20 years, ever since the director of this drama, Ayatollah Ruhollah Khomeini, and his devoted followers overthrew Shah Mohammad Reza Pahlavi - the last in a line of Persian monarchs dating back to Cyrus in 559BC - and installed a religious government. The revolution was an artesian well that struck everything. But rather than sit back feeling sorry for himself, he insists that now, more than ever, he still has many obligations. ''If I am not willing to do anything about it myself, why should I expect it to change? Why should

I expect other people to come to the rescue of Iran?''

The Mihan Foundation, which was incorporated last year as a non-profit, apolitical educational research organisation, aims to introduce Iran to the wider international community and ultimately, and perhaps more importantly, to serve as a vehicle of dialogue and contact between Iranians at home and not only the expatriate community abroad but the international community at large. It will be a sort of agency, not ostensibly political, servicing the needs of the Iranian diaspora.

Reza Pahlavi wants to create ''chapters'' in as many areas outside Iran where there is a high concentration of Iranians who will come up with projects, administer, oversee and raise funds with the aim of becoming a mechanism for modernising Iran. Communication, he says, is the key. ''We have established an interactive website to serve as a communications centre and informational clearing-house for Mihan's initiatives. The net is proving a valuable tool because people are less fearful of being caught than if they were sending letters. We also have many networks inside the country but we have to keep them secret for obvious reasons.'' The old mullahs in their medieval robes, the conservative and liberal scowling clerics who have joined forces, will be defeated, it appears, by the Internet.

Pahlavi became heir to the Peacock Throne on 31 October, 1960. His years in exile have forced a great deal of contemplation. Realism and evolution, it seems, have taken over from revolution and thoughts of armed struggle. He is dutifully circumspect. ''Perhaps we are beyond the era of revolutions,'' he offers, with bright-eyed optimism. ''I think we have entered an era of evolutions and for an evolution to work towards a democratic end, it is not by preaching danger, violence and conflict. It would be contradictory to be an advocate of freedom and democracy while using violent means, it simply would not last.''

Yet in the past he spoke of armed struggle as ''the last option''. Why does he no longer consider this? He reflects ruefully. ''Under a repressive system, whether it's for survival, or whatever, then frankly what other option would a nation have? But I've always said it's the last option, not because we want it but if they force us to it then we don't have a choice.''

As a result of the past 20 years and of the way the current regime, led by Mohammed Khatami, swept to power two years ago in the 1997 election, Iran has remained isolated from the rest of the world. The moderate candidate carried almost 70% of the vote, and presaged and promised changes. However, most of the changes have been opposed or thwarted by the Supreme Leadership Council which sits over him, led by Ayatollah Khamenei, the successor of Ayatollah Khomeini, who has overall charge of the judicial system, the police and the broadcasting organisations.

Iran, insists Pahlavi, has projected a peculiar image of his country to the outside world as if the nation as a whole is identifiying with their utopian vision of Revolutionary Islam, ''which is not the truth at all''. His countrymen are paying the price for that at the expense of the country. Further, the Iranian diaspora, in terms of means, both economic and intellectual, is quite capable, though as yet he has been unable to make use of such talent.

His role is that of a catalyst. By that he means bringing all sorts of factions, regardless of their viewpoints, to the table, advocating the importance of a consensus at a national scale. The priority should be a move towards democracy in Iran. ''It doesn't matter if you are a monarchist or a republican, if you are a leftist or a rightist. The key point is to restore a semblance of freedom in Iran.'' From the day that he announced his willingness and readiness to assume his responsibilites as the heir to the throne, keeping a democratic option alive for his countrymen, he believes the answer is a fairly simple scenario - Iran would eventually have a kind of referendum. The people will decide if they want a monarchy or a republic.

Iran has a very rich history, a strange and complex culture, he tells me. But in terms of modern politics, it really hasn't had much practical experience. In terms of instinct it is pretty good, but in terms of practice, evidence of it has still to be seen. It is not like Iran never had the opportunity to grow, because if you compare Iran before the revolution to what it is today, the degree of modernity, progress, technological advancement, women's emancipation, whatever, a great deal has been done. ''Yet I'm still in exile sitting here. There must be some reason for this.''

The legacy of your father, I venture? He blows out an exasperated breath. Mohammad Reza Pahlavi, despite his liberalism, acceptance and embracing of Western ideals and standards, was revealed to be a parvenu who was not seemingly equal to the demands made by his office. The Shah's Westernisation policies, coupled with his often working class rhetoric and blinkered autocracy, led to many mistakes, and determined the content of the revolutionary movement that was developed against him. He lived in vast, grand palaces stuffed full of baroque furniture and fantastic expanses of thick carpets, in rooms that took minutes to walk across. His life was a modern cultural phenomenon.

On the surface the Shah's regime appeared civilised, but often it was a stunning mask spread across insects. Pipelines for the export of gas and oil were built beside poverty-stricken villages and mud huts cowered under fancy high-rise apartments. The government left the doors open to foreign trade until the country was choked - it was anxious to show that Iran could keep in step with the march of civilization. His regime was seen by many as repressive, one that had abused and persecuted Iranians for many years.

Pahlavi skips round this deftly, knowing the script and the ensemble of actors. ''I have no problem with criticism, as long as it is constructive. One has to be able to distinguish between this kind and those who would just attack based on prejudice, those who knowingly were spreading poisonous comments in their attempts to manipulate public opinion against us.''

The crisis that occurred in his country was due to many factors. In particular, he thinks, a certain malaise was created whereby the degree of attention that should have been paid to political evolution was lagging a little behind economic progress, creating some internal crisis. ''I'm not trying to say that we had it good, that's not good enough for me, what I'm trying to say is that as a nation we need to graduate to the next level to deserve a better future. Democracy cannot be handed to any nation on a plate. It's not like a tea bag that you stick in hot water and have instantaneous effects.''

To ask Pahlavi about his childhood and formative years is to invite a short rattle through the facts, with the occasional anecdote. He talks about his father but reveals their relationship was not close. He has calculated he spent around two months in total with his father. He was enrolled in primary and secondary courses at the Reza Pahlavi School from 1966-77. The school was set up within the walls of Niavaran palace, the winter residence of the royal family, and was attended by some of the best pupils in Tehran. Following his secondary education, he travelled to America where he pursued his teaching program with the United States Air Force Academy, in Colorado Springs. He later went through the undergraduate pilot training programme at Reese Air Force base in Lubbock, Texas, and subsequently obtained his USAF pilot wings.

In 1979 he accompanied his parents in exile in Morocco, the Bahamas and Mexico, while later that year he enrolled at Williams College, Massachusetts, where he studied Political Science. He interrupted his studies to join his father in Cairo, where he remained until the Shah passed away. A short time later he moved to Morocco where he resumed his studies through a correspondence course, obtaining a Bachelor's Degree in 1984. Pahlavi moved from Morocco to the United States in 1984. On June 12, 1986, he married Yasmine Etemad-Amini, an Iranian born in Tehran. His wife graduated from George Washington University Law School in 1998 and is currently a member of the Maryland Bar Association.

His relationship with his father has made him think about his own position as heir. In a way he has to compete with him, this fantasy. Try to become airborne with the fuel that the competition brings. But he has his responsibilites to his family and countrymen. But in order of priorities, he says, everyone now and then has to take a deep breath, ask where they are going. ''I'm sure there were so many things that my father could have said that he took to the grave with him. Whether it was calculated or not, I don't know, but I think that he really needed to have time to himself. I'm not sure if I can put my own family through that.''

Ironically, he calls his position a ''burden''. In his case, there is a tremendous amount of expectation. ''It's like being a prisoner. In an odd way, a political prisoner. Not imprisoned by any government, but imprisoned in the court of public opinion. Everybody says you don't belong to yourself, you belong to us. Until the day that I have the responsibility - and perhaps I should say the unique responsibility - to hold and preserve that institution, that burden is on me.'' He shrugs.

For the last 20 years he has been in a kind of paralysis over his destiny and the role he should play in shaping his country's future. Still he remains careful when speaking about his father's reign, which he refers to as ''the previous order''. Each period of time has its own peculiar set of circumstances. ''When you think of the era that I would be involved in, it would be totally different from my father's. I think that in my case I shouldn't be called upon in any administrative function, the monarch should be protected by the constitution itself as someone who is not responsible for government. Pure and simple. I would be the Head of State not Government. I wouldn't care who my next Prime Minister might be. If he's a communist, a republican, a conservative, a radical, whatever. That's for the people to decide. If one individual, the King, has sole responsibility for the country, and that

individual is taken out of the puzzle at some point, the whole thing is ruined. One individual left the country and look what happened. Should we as a nation depend any longer on one individual? I don't think so.''

We turn to the recent student protests in Iran which, to the outside world, looked as though the next Iranian revolution had begun. It was all there in the barricades, the slogans, the tear gas and the angry charges against the conservative policies implemented by the country's ruling elite. Since the death of Ayatollah Khomeini, more than 10 years ago, the conflict between religious conservatism and progressive secularism has dominated the Iranian political agenda.

For Pahlavi the student movement in Iran was very important, despite the fact it never quite reached out to other discontented groups in the population: the poorer lower-middle classes and the unemployed and the urban workforce. ''They are still afraid. They don't know if they are going to be supported or ignored.'' But he doesn't apportion blame here. He turns instead to ''the German, or French, or Italian, or British, or whatever companies doing business in countries like Iran, serving ultimately the ends of certain institutions that control everything, over the head and at the expense of the people of that nation. You cannot expect the people in Iran to think that if there is injustice in Iran, that there's any chance for them to see change because the status quo seems to be preserved. Economic issues outweigh the moral issue. We have an Islamic apartheid right now.''

In present-day Iran inflation runs at around 20% each year, while a dramatic drop in the price of oil from the 1980s, coupled with production problems in Iran have caused a fall in oil revenue - $22bn in 1976 to $10bn in 1998. Since the inception of the Islamic republic the regime nationalised all the major industries, spending billions of dollars per year to subsidise the cost of electricity, bread and fuel. Foreign investment has been discouraged and many of the country's business and technical elite have fled the country.

Popular newspapers are closed at will, Iranians are forbidden to kiss or hold hands in public, women cannot wear make-up or clothes that reveal the outline of their figures. They walk around in groups, completely covered in black garb, like beasts with a thousand eyes. On the one hand, the ruling Islamic regime has succeeded in repressing Iranian women. Yet, by the same token, paradoxically they are making them visible. Every private act or gesture in defiance of the government's rules is an effective political statement.

The demand for free expression and human rights is being made with an ardour that has begun to frighten the government. ''The student movement is telling the whole world: 'Listen, I'm thinking now, I'm looking at things, I'm analysing things, I don't take anything for granted anymore, I want an explanation, I want an education, I have certain rights, goals and I want to get there and I'm taking it in my own hands to do it.' ''

Whatever finances he has were cut significantly when his financial advisor - a friend from his boyhood, a relative in some way - stabbed him in the back: #16m or so was squandered. It was, he adds, a sad situation. ''At the time I had turned over the management of my own personal finances to this individual. At 20 you don't know any different. Sadly, it was the wrong thing to do. As a result, I was hurt badly. Such is life. One has to cope with it and move on. But that is behind me now.'' His wife works. He has done a little bit of consultancy work. He gets some financial support from his mother. ''I'm not complaining, but I want people to understand that we are not talking about anything that would be close to what is suggested.''

We spend some time discussing the new regime of Mohammed Khatami. While he concedes that what is happening today is interesting (there are elements more liberal and progressive), Khatami is still representative of the Islamic republic. He is not really there to change the regime, but to prolong its survival by giving some degree of liberal approach. Could Khatami ultimately bring democracy to Iran? ''If that's so then he is undermining this theocracy itself. Just because you have a moderate, doesn't make the country any different. Some of the Nazis were more moderate than others, it doesn't mean they were not Nazis. Khatami is bound by the limitations placed upon him by the system.''

He is not worried by the fact he has no son to continue the line to the Peacock Throne, because he already has his heir. ''Gender should not stop anyone from becoming heir to the throne.'' He laughs. He would love to be back in his country, but in what capacity he is unsure. It's for the Iranian people to decide what becomes of him. ''They know where I'm coming from, they know what I'm willing to do, they know what they'll get. I'd be just as pleased to serve my country as an ordinary citizen.''

Whatever sides there are to the orchid of Iran - opulence, barbarism, hardliners, veiled women, verdant Caspian shoreline, seething crowds, intellectuals, swords and scimitars - from one revolutionary abreaction to another, the country has been viewed through a prism of cultural distortion by the West. For the West Iran remains and represents a palimpsest of incredible associations. A few hours have passed. But even with this you cannot attempt to construct the whole from a few fragments. Somewhat portentously His Majesty Reza Shah II sums it up thus: ''If we haven't learned enough then, by God, what a waste, what a tragedy.''