Pop Art pioneer is back in the picture

A retrospective of German Dadaist Kurt Schwitters will show how he inspired artists from Richard Hamilton to Damien Hirst

Kurt Schwitters, the pioneering German Dadaist now acknowledged as the founder of performance art, was hopelessly misunderstood in his lifetime, at least when it came to the general public.

Even before he came to Britain – fleeing Nazi Germany in 1940 – his epic sound poem, Ursonate or Ur Sonata, comprised solely of abstract sounds was being pilloried in the national press. The BBC's response in 1947 didn't help. When two reporters turned up to his solo exhibition at London Gallery to record a live performance of Ur Sonata (sometimes translated as "a sonata in primal sounds"), they left halfway through without recording it at all. Only 28 people attended the recital and a fellow artist remembers Schwitters' enduring positivity in the face of an evident lack of interest in the room.

The sound poem, and other works created by Schwitters, have all since been fully reappraised and vindicated. In the past few years, a Schwitters revival has gained ground: Jarvis Cocker played Ur Sonata on BBC Radio 6 Music in June last year; Michael Nyman wrote an opera about the artist in 2003 entitled Man and Boy: Dada; Bryan Ferry is a fan; Damien Hirst owns his sculptures and has spoken of the artist's influence on his own early work.

Yet the public is still, by and large, relatively uninformed of the immense imprint left by Schwitters on contemporary British art. Tate Britain hopes to change that by staging a major exhibition, Schwitters in Britain, opening on Wednesday, which will showcase 150 collages, sculptures, paintings and sound poems – some seen in the country for the first time. The exhibition will focus on the years between his arrival in Britain as an "enemy alien" from Germany in 1940 until his death in Cumbria in 1948.

Schwitters developed the concept of "merz" while he was still in Hanover in the 1920s. This was the idea that any object – foraged or found – could be transformed into artistic material if used in the right way by an artist. So a pebble or a piece of corrugated cardboard became as legitimate as oil paint in the construction of an artwork. Emma Chambers, curator of the Tate Britain show, says he referred to string as an analogous line and cotton wool as softness in the formal composition of his work.

While "merz" is hardly a new concept to us today, it was radical then. He carried on his work abroad, first in Norway where he lived briefly after fleeing Germany and then in Britain where he was interned on arrival. During this period on a camp on Isle of Man, he began making work from whatever material he could get his hands on. He dismantled tea chests and tore up linoleum from floors as well as using debris such as stamps and sweet wrappers for his art.

Fellow artists reported the stink emanating from a work that he had made from porridge in the absence of more conventional artist's material. In the exhibition catalogue, Jenny Powell, a co-curator, quotes a friend and fellow artist, Fred Uhlman, also at the camp, who saw the sculpture. "The room stank. A musty, sour indescribable stink which came from three Dada sculptures which he had created from porridge, no plaster of Paris being available. The porridge had developed mildew and the statues were covered with greenish hair and bluish excrements of an unknown type of bacteria."

In the camp, he took part in group exhibitions and also gave poetry performances, producing up to 250 works and giving impromptu poetry recitals that raised the spirits of the other inmates. Chambers says that many on the camp came to greet each other with sections of the Ur Sonata.

On release in 1941, he met Ben Nicholson and Barbara Hepworth, exhibiting in shows alongside them, while the critic Herbert Read described him in glowing terms: "Schwitters has shown that it is possible to make art out of anything – so long as one is an artist. Used tram tickets, pieces of cardboards, or corrugated paper… Schwitters has pursued this line of development far beyond that reached by Juan Gris and Picasso. Schwitters is a supreme master of the collage."

Schwitters relocated to the Lake District in the mid-1940s and inspired by the rural landscape, he began to incorporate natural objects into his work. This culminated in the creation of the monumental installation, The Merz Barn, comprised of six room-size sculptures that were made from organic material such as twigs and stones. This was a continuation of the Hanover Merzbau – an architectural construction which was also made from "found materials" before the Second World War but destroyed during the Allied bombing.

His concept of merz developed further and prefigured the British Pop Art movement, especially in his groundbreaking collages. He began incorporating commercial images, some cut out from Life magazine, a publication his American friends sent to him. His legacy, according to Tate Britain director, Penelope Curtis, "begins with Richard Hamilton and continues through to Damien Hirst". Indeed, Hamilton was among those instrumental in the Schwitters revival some years after his death. Schwitters had been working on a wall, built within the Merz Barn, which Hamilton helped to move from the Lake District to the more accessible city of Newcastle.

Years before Andy Warhol's Campbell soup tins, Schwitters incorporated fragments from packaging and newspapers into his collages, which reflected ordinary British life such as London bus tickets, or Bassetts Liquorice Allsorts wrappers used in Untitled (This is to Certify That), in 1942.

Ms Chambers says the public – rather than critical – response to such collages was uncomprehending. "All the newspaper articles talked about his work being made from rubbish. The implication was that his work was also rubbish."

Just before his death, he was in talks with various galleries including the Museum of Modern Art in New York, about staging exhibitions. Yet when he died, his work seemed to die with him. He was rediscovered in the late 1950s when artists began to understand the extent of his groundbreaking concepts. His ideas "had a currency that they didn't have when he was alive," says Chambers. His retrospective now, more than 60 years after his death, has been a long time coming.

Schwitters in Britain, Tate Britain, London SW1 (020 7887 8888; tate.org.uk) Wednesday to 12 May