I was trying to write the ultimate pop song," said Kurt Cobain, offering one of his numerous, but contradictory accounts of Smells Like Teen Spirit - he also scoffed, "It was a scam, a time marker. What I was into was making money and abusing people's trust" and "Basically, I was ripping off the Pixies". But Smells Like Teen Spirit is far, far better than almost anything its lyricist and co-composer ever said about it.

By early 1991, Nirvana finally felt they were getting somewhere. Fellow denizens of Aberdeen, Washington, Cobain and bassist Krist Novoselic had formed the band four years earlier and recorded a raw punk album, Bleach, for Seattle label Sub Pop. Along the way they disposed of more drummers than Spinal Tap until, in 1990, they met Dave Grohl. Before he joined they already had a demo tape produced by rising underground name Butch Vig. This had secured them a contract with management company Gold Mountain the previous November and provoked a lively major label bidding war.

So they strove to strengthen their set, writing and rehearsing hard. For Cobain, words and music came about by two separate processes. Most nights before he went to bed he would scribble "poems". Then when the band had a song coming along, he riffled through his notebook for lines that took his fancy, regardless of how they connected with one another. "I make up the theme to a lyric well after the fact, oftentimes as I'm being interviewed," Cobain told Q, with downbeat candour.

In late 1990, after a convivial evening graffiti-ing Olympia, Washington state capital, Cobain's friend Kathleen Hanna from Bikini Kill spray-painted "Kurt smells like Teen Spirit" on the wall of the apartment he shared with Grohl (Teen Spirit being a US brand of deodorant). The following spring, while Grohl drove them over to Tacoma, near Seattle, for rehearsals, with a new riff in mind Cobain wrote the phrase in his notebook and began gluing his poetic fragments together. On arrival, he played the others what he had and they jammed it for an hour and a half until the song took shape. At which Novoselic and Cobain looked at one another and, according to the bassist, said, "Pixies! People are really going to nail us for this."

However, they soon played it live for the first time, possibly at the OK Hotel, Seattle, on April 17. That they signed with Geffen on April 30 seems to have been entirely coincidental, but it turned out to be the song that alchemised a modest record deal into triumph, chaos and tragedy for Nirvana, and a new direction for rock music all over the world. A week before recording started in late May, producer-elect Don Dixon pulled out and Butch Vig stepped up from his role as engineer. The band made the long drive to Los Angeles and into rented rooms in an apartment building near the chosen studio, Sound City in Van Nuys.

Vig got a lift the moment their first rehearsal began. They launched straight into Smells Like Teen Spirit, which he had heard only on a live tape. Nirvana watched him start to pace around the control room as it grabbed him. "I don't exactly know what it means: 'he said later, "but you know it means something and it's intense as hell ." He was soon telling them this "anti-anthem" should be the first track on the album.

Grohl and Novoselic were consistently enthusiastic, but Cobain's energies proved less reliable. Unable to lay his hands on heroin and other drugs away from his hometown contacts, he dosed himself with a codeine-based cough mixture which did little to ease his mood swings. Often, he retreated into a corner and sagged into silence for hours at a time. When at the mic he screamed so hard he could only manage three takes. Furthermore, his belief in a punkish spontaneity made him resist reruns.

The basic band track of Smells Like Teen Spirit burst out of a raging, inconsequential row between Cobain and Grohl. Then Vig put together the lead vocal from the usual three takes, though it was a longer job than usual, he recalled. He double-tracked only the groaning "Hello, hello" repeats.

However, Vig's own mix of the whole album troubled everyone. It sounded flat and, with Vig's blessing, Geffen brought in renowned remix fixer Andy Wallace to polish it. This involved "sweetening" the Nirvana roar by doubling some guitars, filtering through effects boxes and even boosting the mighty Grohl's drums with samples. All this sonic compromise pained the purist in Cobain. He called the production "lame", "embarrassing" and "candy-ass". Its only use, he sneered, was that "it sold eight million records and now we're allowed to do whatever we want".

However, on the receiving end of Nevermind, and Smells Like Teen Spirit in particular, the debate about the production and remix seems like the worst kind of muso maundering and picking at artistic navel fluff. Smells Like Teen Spirit is dynamite from the first bare, scratchy guitar riff to the final snarling swirl of "A denial, a denial..." For all that the words scatter splashes and snatches of sense with little logic and no story to tell, the sound is totally coherent, moving between an anguished tranquillity and let-rip rage in the most natural flow of emotion. There's no hint of the mechanistic loud-soft verse-chorus alternation which Cobain would soon add to his catalogue of concerns. The great howl of it, along with certain key phrases which touched raw nerves (in different ways in different countries, probably) gripped a collective imagination. America's Generation X of displaced slackers found their chorus in "We are stupid and contagious/Here we are now, entertain us". A wider circle of people who had run out of whatever it took to stay sanguine in a Bush/Thatcher market-led "new world order" got the existential angst in Cobain's voice and the slither and collapse beyond care for anything which seeped through quieter but gripping lines like "I found it hard/just hard to find/Oh well whatever, never mind".

The single's broad-spectrum oomph brought grunge to America and in British rock pulled the guitar back from the brink of death by beatbox to light the fire for Oasis, Blur and Radiohead. In fact, it achieved many of the flickering, fond hopes Kurt Cobain expressed a year after its release: "I felt a duty to describe what I felt about my surroundings and my generation and people my age... The entire song is just making fun of the thought of having a revolution. But it's a nice thought."

The sorrow was that Cobain himself could place no long-term reliance on that nice thought. Forever wounded by his childhood broken home, wracked with undiagnosable stomach pain, addicted to heroin, he distrusted his audience - "Fuckheads who don't get it" - and, ultimately, his own music. After his suicide, an uncle back home in Aberdeen reflected to Cobain biographer Christopher Sandford that his nephew had always seemed "oppressed by some sense of not having done right in life".