Luke Harding: The Burma star

From her mansion on the southern side of Rangoon's serene lake, Aung Sang Suu Kyi has an exquisite view. The lake is fringed with coconut palms, tropical casuarinas, and scruffy banana trees. Only the encircling barbed-wire fence reminds visitors that this beautiful place is in fact Burma, a country aptly described as a 'fascist Disneyland'. For the past 19 months Suu Kyi - pro-democracy activist, Nobel peace laureate, and 56-year-old widowed grandmother - has been unable to leave her Rangoon villa.

Earlier this week it seemed that her most recent period of house arrest was about to come to a dramatic end. Burma's inscrutable military government took the unprecedented step of issuing visas to journalists. It sent a work gang to fill in the potholes leading to Suu's home.

The UN's special envoy Razali Ismail, who has been secretly negotiating with Suu Kyi and Burma's middle-aged triumvate of generals, said he expected her to be freed within days. 'Something big' was about to happen, he declared. But, as of last night, Suu Kyi was still marooned in her compound, surrounded by her personal staff, family heirlooms and her favourite Sherlock Holmes detective stories. Had her release gone wrong?

Western diplomats in Rangoon, made phlegmatic by the daily six-hour power-cuts as well as the junta's opaque methods, say the delay could mean something. Or it could mean nothing. In a land where the internet is banned and information scarce, nobody really knows.

'I've been here three years. It's difficult to say what's going on,' one diplomat admitted. 'She's extraordinarily strong-willed. She's extremely sweet if she likes you but she can be tough too.

'She's sacrificed an awful lot for her country,' he added. 'We all think she's marvellous.'

The sticking point appears to be the conditions attached to her release - whether, for example, she is free to travel - and the fate of hundreds of political prisoners belonging to her National League for Democracy (NLD). Her party won Burma's last general election in 1990. The junta refused to recognise the result. It placed her under house arrest for six years, let her out in 1995, then re-arrested her in September 2000. But as a result of this interminable standoff, there are now distinct signs that Burma is on the brink of profound change. The country's economy is a shambles. Britain and the rest of the international community have deprived it of aid.

After four decades of isolation and brutal state repression, its military leadership now appears willing to try something a bit different. The process of what the junta calls 'national reconciliation' may not lead to multi-party democracy, though. For Suu, as she is known to her friends, it has been a long wait.

The daughter of Burma's independence hero Aung San, who was assassinated when she was two, she always seemed destined for a career in politics. But her journey there was a circuitous one. Her father was one of the original '30 Comrades' who liberated Burma, first from Britain then Japan - only to be gunned down by a political rival months before independence.

Growing up, Suu was a diplomatic kid. In her teens she lived with her ambassador-mother in India. By the time she arrived at St Hugh's College, Oxford, to read PPE, her absolute sense of ethics was already at odds with the relativist sexual morality of her curious Sixties English girl-peers. Asked by one student whether she would ever sleep with a boyfriend, she replied: 'No! I'll never go to bed with anyone except my husband. Now I just go to bed hugging my pillow.' (Her contemporary Ann Pasternak Slater recalls how Suu, an 'oriental traditionalist', became teetotal after trying one small bottle of sherry in the ladies' loo of the Bodleian Library. Her essays were written with Austenesque irony, she noted.)

After working at the UN in New York for two years, Suu married Michael Aris, a Tibetan PhD student, who later became an Oxford don. During the Seventies and Eighties Suu brought up her two sons, Alexander and Kim, in Britain. She kept up her academic work. And she became increasingly obsessed with Burma's struggle for nationhood, and the frustrated legacy of the father she never knew. In a letter to her husband shortly before they married, she wrote: 'I ask only one thing, that should my people need me, you would help me to do my duty by them.'

That moment came in 1988 when, with her mother dying, she returned to Rangoon. There were protests on the streets; Burma's ageing dictator, Ne Win, had just announced his resignation, to be followed by elections. Her arrest by the junta spelled the beginning of a long period of isolation from the outside world, from her rapidly changing sons, and from her husband. The super-human nature of her sacrifice became clear three years ago, when Dr Aris was diagnosed with terminal cancer.

The generals refused him a visa to say good-bye. Instead, they suggested she should return to Britain like a 'good wife' - making clear she would never be allowed back into Burma. She refused. 'When I met her in 1999 she told me that Michael was dying of cancer and nobody knew about it publicly. It was so obvious that she wanted to see him,' one supporter said. 'She was put in an absolutely impossible position.'

She has seen her new grandson only once. Even after her last period of release in 1995, her activities were severely restricted. After all this, there is a growing sense that Burma's rulers - who go under the Orwellian title of the State Peace and Development Council (SPDC) - now realise they are dealing with an opponent they cannot beat. They have described her as a 'foreign stooge' and 'genocidal prostitute'. But little of this vituperation rubs off on ordinary Burmese, who refer to her simply as 'The Lady'. She remains immensely popular inside Burma, though few people are willing to express their enthusiasm openly.

After winning the Nobel Peace Prize in 1991- an award she has so far been unable to collect - Suu Kyi has, inevitably, become an icon in the West. Her Oxford background and luminous beauty ('She's incredibly attractive', one awed admirer said) are obviously part of the appeal. But Suu Kyi herself has resisted this Diana-like cult of personality - and pointed out that the struggle is not hers but her people's. However miserable her circumstances, their suffering is worse, she argues. She even has a few faults - a tendency, perhaps, to memsahib-ishness and a willingness to bite the heads off visitors she regards as fools.

Since her most recent period of house arrest began 19 months ago, life at her residence, 56 University Avenue, Rangoon, has fallen into a routine. She gets up at 4.30am. She meditates, reads, and plays the piano. She listens to the BBC. It is an ascetic existence, unmediated by newspapers, magazines or the telephone. When she did have a telephone, it was bugged. Most days the 'uncles'- the elderly clique of NLD leaders who have been with her since the beginning - drop in. They discuss strategy. They swap gossip. Despite her dismal circumstances, Suu has not lost her sense of humour. She has been known to crack jokes about her country's po-faced rulers.

Until the rumours started about her imminent release, however, there was no prospect of going for a walk beyond the barbed-wire barricades that lead to her home. A 'No-entry' sign tells visitors, in effect, to piss off. The only irony of her situation is that Ne Win, the general who had her locked up, is now himself under house arrest at the opposite side of the lake. Aged 92, he was accused in March of plotting a coup against Burma's current general number one, Than Shwe.

In a speech to Oxford University during her last period of house arrest, delivered by her husband, Aung Sang Suu Kyi cites Karl Popper's remark that darkness has always been present in our troubled world - but that the light is new. Even the smallest light cannot be totally extinguished by all the darkness in the world, she points out. One can only hope that her solitary struggle is reaching its end. One can only hope that the light doesn't go out.