Fifty years ago a transvestite with "a dark brown voice" walked out of a club "where you drink champagne and it tastes just like cherry cola" into the "mixed up, muddled up, shook up world" of rock legend.

On its release in 1970, Lola was considered The Kinks’ most daring song yet. Nowadays many regard it as an anthem about gender non-conformity and sexual liberation.

But Kinks founder and guitarist Dave Davies traces the origins of the song to the more modest surroundings of the house in Muswell Hill where he grew up in the 1950s and early 1960s with his elder brother Ray and their six sisters.

Speaking by video link from New York, where he now lives, Davies explains: “There were women around me all the time. And I always thought that influence had a profound effect on me, because I thought nothing of dressing up in their clothes. It was a way of fun and experimenting.”

Years later, an encounter between The Kinks’ manager Robert Wace and a drag queen at the Castille nightclub in Paris provided further inspiration for the song.

Lola features on the re-issued Kinks album Lola Versus Powerman and the Moneygoround, Part One, which came out last week. The new issue includes remixes, out-takes and conversations between Dave and Ray, recorded in Ray’s kitchen at his home in Highgate.

The two brothers formed the band – together with Pete Quaife and Mick Avory – at their family home in Denmark Terrace, Muswell Hill, in 1963. Although Davies says that “music came along and sort of whisked me away from Muswell Hill,” he still retained close links to the area.

For a time, he and Mick Avory shared a house near Cranley Gardens, where he also lived with the music journalist and Ready Steady Go! presenter Michael Aldred. “Me and Michael were close,” Davies says, “I guess he thought we fell in love. But I used to bring girls home all the time, and Michael got a bit pissed off!”

Davies says that his relationship with Aldred made him realise that he was fundamentally “a heterosexual man”. But he is open about his homosexual experiences and talks about his close friendships with other men, including blues singer Long John Baldry and Rolling Stones founder Brian Jones.

“It’s nice to be close to someone who you’re affectionate with,” he says. “I gravitated towards friends who were more stimulating creatively. Many people I started to meet liked to experiment sexually. It wasn’t such a big thing. Long John Baldry and I were really good friends. We used to spend a lot of time together, and we’d hold hands and kiss. We never actually made love or had sex together. Not really. I liked Brian Jones. He was a big influence. He was very flamboyant and had unusual ideas.”

For Davies – who re-released his own solo album Rock Bottom: Live at the Bottom Line earlier this year – blurring boundaries and breaking taboos were part and parcel of the social and sexual revolution of the 1960s.

“The ’60s was a time of many breakthroughs,” he recalls. “People, including me, were experimenting with ideas. I was a bit of a rebel, and it was a time of rebelliousness. I just wanted to do things that I wasn’t supposed to do. I didn’t know at the time that homosexuality was still illegal. Directly I went into the music business, I suddenly realised how many gay people there were. And I thought, why not? I’m in for the ride. It was a time of newness, and you could try everything out. It was a similar thing with fashion. I went out and bought silly hats and all kinds of gowns. Fashion was kind of a bit like cross dressing.”

Which brings us back to Lola. Does Davies think that ‘she’ helped influence people’s attitudes towards sexual difference? “I like to think so,” he says. “But it’s kind of mutual influences. We were thrust into this brand new world. People were experimenting with sex, with drugs, and with that flamboyant way of artistry. You learn from it and you inform it back in a way. I think we influenced that culture for the better. Or at least for the different.”

John-Pierre Joyce’s book Odd Men Out: Male Homosexuality in Britain From Wolfenden to Gay Liberation, 1954-1970 is available from local bookshops, Amazon, or directly from the author at newsmailjpj@yahoo.com