The turbulent times of Don Dunstan, a revolutionary in hotpants

He was charismatic, flamboyant and controversial. A decade after his death, Australians are still divided by the nation's most colourful politician

The shy younger sister of Sydney and Melbourne, Adelaide has, in the eyes of most outsiders, just two claims to fame. It is the "city of churches", being well endowed with places of worship. And it is Australia's "murder capital", the site of a series of particularly grisly killings.

Roll back to the 1970s, though, and Adelaide had a different image. While the rest of Australia was still a social and cultural backwater, Adelaide was a place of restaurants and pavement cafes, where the arts flourished, and equality and social justice guided politics. The city was known as the "Athens of the south", and one man was largely responsible: the state premier, Don Dunstan.

Dunstan was a theatrical, flamboyant figure who once famously wore a pair of tight pink shorts to parliament. He was also a man of great erudition and political nous. His social reforms changed the face of straitlaced South Australia, of which Adelaide is the capital, and paved the way for the rest of the country to follow suit.

Now his legacy is being re-examined, thanks to a play recently showing at the Adelaide Festival of Arts, a biennial event that incorporates the world's largest literary festival. Its title, Lovers and Haters: The Turbulent Times of Don Dunstan, reflects the mixed emotions that the charismatic Dunstan evoked, and the passions that he continues to arouse, nearly 10 years after his death from cancer.

Dunstan was an unlikely Labor man. He came from a middle-class farming background, and attended one of Australia's leading private schools before studying law at Adelaide University. He spoke with a plummy accent – and yet he was adored by the working people of South Australia. "He was very much for the people, but he was not of the people," says Rob George, who co-wrote the play with Maureen Sherlock.

Adelaide in the 1960s was a grey, deeply conservative place, having been ruled for three decades by the Liberal Country League, with a former cherry farmer, Sir Thomas Playford, at its head for most of that period. Dunstan took over in 1970 and was premier for the next nine years. It was as if the state had woken from a long slumber, recalls one South Australian. Dunstan was a great epicurean, and he was among the first to promote Australian wines and the cuisine of immigrants, mainly Italians and Greeks at that time. He abolished archaic laws forcing pubs to close at 6pm, created a café culture in Adelaide, and even wrote a cookbook while in office. He later opened his own restaurant, Don's Table.

A lover of the arts, Dunstan set up Australia's first film corporation, using a model subsequently emulated by other states. The result was films such as Picnic at Hanging Rock. He helped expand the Adelaide Festival, which had been founded in 1960, and provided the momentum for the establishment of the Adelaide Festival Centre, the city's main arts venue and its cultural heart.

A passionate believer in social equality, Dunstan hauled South Australia into the modern era. His was the first Australian state to decriminalise homosexuality, introduce equal rights for women, pass anti-discrimination laws, abolish capital punishment and recognise Aboriginal land rights. He appointed the country's first female Supreme Court judge. His was the first government, anywhere in the world, to make rape within marriage a criminal offence.

He was also a showman. A clairvoyant predicted that Adelaide, having become Sodom and Gomorrah under Dunstan, would be wiped out by a tidal wave at noon on 19 January 1976. Some locals believed it, and sold their beachfront properties. Others fled inland. Thousands of curious onlookers gathered at Glenelg beach at the appointed hour, and Dunstan was among them – poised to "hold back the tide" on behalf of his fellow citizens, in the unlikely event of the prophecy bearing fruit.

He was, says Rob George, "a brilliant flash of colour in the grey world of politics" – and his private life was colourful, too. Dunstan, who favoured cream safari suits when not sporting pink shorts, was a closet bisexual. At a time when homosexuality was still illegal and homophobia was rife, he formed indiscreet relationships, most notably with John Ceruto, a restaurateur who later "outed" him in a book called It's Grossly Improper. Dunstan even employed Ceruto in his office, as a catering officer.

Their liaison is scrutinised in Lovers and Haters, as is Dunstan's power struggle with the South Australian Police Commissioner, Harold Salisbury, whom Dunstan, in a spectacular lapse of judgement, had appointed to the post. Salisbury, it emerged, was keeping "security files" on thousands of undesirables, such as trade unionists, church leaders and Labor politicians. There was also a "pink list" of homosexuals, who – like the others – were being kept under surveillance.

One man, an Adelaide University law lecturer, George Duncan, drowned in 1972 after being thrown off the bank of the River Torrens, in the city centre. Two vice squad officers were later charged and acquitted.

Salisbury, whom Dunstan eventually sacked, was not his only enemy. The Labor leader was regarded as a class traitor by the political establishment. His trailblazing social reforms were anathema to conservatives. He could be pompous and arrogant, and he flaunted his learning, never using one short word when three long ones would do.

Rumours swirled around him. He was said to have "a touch of the tar brush" – in fact, he was born in Fiji to South Australian parents. And then there was his sexuality. The South Australian Chief Justice, John Jefferson Bray, was gay, too. A series of unexplained murders in Adelaide was linked to a clique of highly placed paedophiles. That conspiracy theory is still being peddled today.

The play also focuses on Dunstan's very loving relationship with his second wife, Adele Koh. (He had three children with his first wife, Gretel.) Koh, a Malaysian-born journalist, died of cancer two years after they married, and that – together with other stresses, including the stand-off with Salisbury, and the imminent publication of the book featuring his letters to Ceruto – precipitated a breakdown. He collapsed in parliament and was taken to hospital, where he called a press conference in February 1979. Wearing pyjamas, and leaning on a stick, he announced his resignation. The Dunstan Decade was over.

Thirty years on, South Australians still recall him with fondness and nostalgia. For as well as being a political visionary and a man of great eloquence and courage, he had the common touch. At one time a building society was rumoured to be in crisis, and people were queuing outside to withdraw their savings. Dunstan went down there with a megaphone and assured everyone that their money was safe. Such was their trust that they believed him, and departed.

For young people, in particular, he was an important role model. "He had a huge influence on my politics and how I viewed the world," says Rose John, a community health nurse who grew up in Adelaide in the 1970s. "We felt privileged to have him as our leader."

John Schofield, a musician, says: "Dunstan was a breath of fresh air. He was decades ahead of anyone else in this country. He was young, and he was cool, and he had an Asian wife. Adelaide was a fantastic place to be in the 1970s. It was all happening there. He made it OK to play rock and roll, and paint pictures, and be an intellectual.

"When he left office, South Australia went back to being monumentally boring, and we all left town. We realised we'd been spoilt. Once Don was out, there was no point in staying. Within 12 months of him resigning, my friends and I had all gone to live in Melbourne or Sydney."

Despite its conservative image, Adelaide was fertile ground for Dunstan's changes. It had always been different from the rest of the country, having been founded by free settlers rather than convicts. It was also established on a principle of separating church and state; the colony, which promised civil and religious liberty, attracted Lutherans fleeing religious persecution. South Australia was one of the first places in the world to give women the vote, and to introduce secret ballots. Long before Dunstan came on the scene, it was the progressive capital of Australia.

Dunstan built on that heritage. Within South Australia, he relaxed censorship laws, curtailed the powers of the police, bolstered civil liberties and decriminalised marijuana. His was the first state to introduce consumer protection laws and protect heritage buildings. He reformed the electoral system, and helped to reshape the Labor Party nationally, campaigning for it to drop the White Australia policy that kept out non-Anglo immigrants.

Rob George and Maureen Sherlock grew up in Adelaide and lived there until 2000. "We enjoyed the fruits of his endeavours," says Mr George. "He had an incredible impact on the town and the state. He put Adelaide on the map. Instead of being a backwater, we were this place everyone was looking to. He made people proud to live in Adelaide."

Jane Lomax-Smith, a former Lord Mayor of Adelaide, now the state Minister for Education, Tourism and the City of Adelaide, says: "In order to appreciate how extraordinary Don Dunstan was, you have to realise how ghastly Australia was in the 1950s. He was a magnet for creativity, in the Trudeau or Kennedy mode. He made Adelaide the Renaissance capital of the southern hemisphere.

"He was such a sophisticated, cosmopolitan, highly-refined person, yet he had the capacity to connect with the problems of ordinary working people, and he was able to translate those problems into significant legislative reform. He was a consummate politician."

Many who have seen the play agree with a Dunstan quote that inspired the title. Told by one interviewer that people seemed either to love or hate him, he replied: "History will prove that I have many more lovers than haters."