Fred Karno was a master of publicity. One of his favourite tricks was to drive a red Rolls-Royce scattering flyers as he went. A former acrobat turned impresario, he choreographed frantic mime shows for his own troupe, Karno's Komics - among whose ranks were a couple of young performers called Charlie Chaplin and Stan Jefferson, who later took the surname Laurel. In 1904, Karno's Komics were rehearsing a new sketch for the Hackney Empire - London's newest, glitziest music hall. One of the young comics hated the sketch so much he started heckling, and Karno's immediate response was to change the act to put the hecklers centre stage. He cast Chaplin, despite finding him "puny, pale, undernourished and frightened", as an inebriated swell, while Laurel played other interrupters of the "show". The Mumming Birds was so popular it transferred to New York - and gave Chaplin and Laurel a taste for the country where they would take their knockabout comedy into the movies.
Not all of the performers who appeared at the Empire made it as far as the silver screen - but that didn't make them any less famous in their time. A more typical music-hall story was that of Fred Barnes. A "wavy-haired, blue-eyed Adonis", fond of pink-and-white makeup and his pet marmoset, he had been inspired to take the stage by Vesta Tilley, a masher (male impersonator) and the original Burlington Bertie. But by 1907, he was bored. Inspired by his father, a Birmingham butcher who despaired of his theatrical son, Barnes wrote a new song, The Black Sheep of the Family, about the "queer, queer world we live in". The song had its first outing on a Monday night at the Empire; the crowd of 1,500 loved it, and Barnes - who later joked that he had written the song in a fit of pique at being repeatedly given a tricky "first turn" billing - was soon promoted to the star slot.
The man who booked him was the impresario Oswald Stoll, as notorious for his prudishness (the brassy vaudevillian Sophie Tucker once yelled at him: "You shouldn't be the manager of a vaudeville theatre; you should be a bishop!") as he was famed for his pizazz. Stoll's mission was to bring refinement to the halls, and his chief ally was his architect, Frank "Matchless" Matcham.
In 1901, Stoll asked Matcham to build him a new theatre. At that time there were 43 music halls in London alone; to beat the competition, the Hackney Empire had to be gorgeous. And it was: all red and gold, smothered in velvet and exuding, according to the Hackney Gazette, "an air of almost Oriental splendour". It was also state-of-the-art, equipped with electric chandeliers and a newfangled projector. The gala programme for December 9 1901 boasted not just the character comic Wilkie Bard ("just as there was only one Bard of Avon, so there is only one Bard of the variety stage"), but also an "American Bioscope with Animated Pictures of the American Yacht Race".
The Empire quickly became popular with the performers, who sometimes worked three halls a night. The undisputed queen of music hall was saucy Marie Lloyd, who could load the most innocent lyric with innuendo. She shared bills with the likes of Harry Champion, a bluff Cockney comic whose hits included Boiled Beef and Carrots and I'm Henery the Eighth, I Am.
Gracie Fields came to the Empire as the star of Mr Tower of London, the 1918 revue that made her name. A Rochdale girl with a big voice and a bigger ambition, she stole the show from its writer Archie Pitt, who married her and became her manager. The marriage failed - but the show played for a decade.
With up to 30 turns a night, there was plenty of room for other, now forgotten acts. There was Hal Joy, The Whistler Comedian, of whom the programme promised: "Those of you who know anything about whistling and even those who do not whistle privately will want to try and imitate this clever exponent of his particular art". Of Beryl Beresford, it was said: "Comic songs are twice as comic when they are sung by Beryl, while her masterpiece (if you can use the term where a member of the feminine sex is concerned!) is a number in which she sings and sobs at the same time!" And there was The Magical Enigma Sirdani, who chewed glass tumblers on stage - "Broken English and broken glass are the most notable features of this unique magician's amusing and amazing act," blared the Stoll Herald.
Such acts hit trouble in the 1920s, when the one-reelers that had been a novelty item on the bills started to take over. In 1929, ads proclaimed: "You simply have to know what's on at the Hackney Empire now that we present talkies, varieties and revue." By 1938, M Willson Disher was writing his now classic history, gushing with nostalgia for "the old idols of the halls who drank champagne with princes in palaces, ate winkles with their old friends round street stalls, and among themselves swallowed champagne, whelks and winkles together".
After the second world war, the Empire played host to Liberace and Tony Hancock - artists with a firmly modern approach. But in 1956, the theatre closed. One of the old-timers singing Auld Lang Syne on the very last bill was GH Elliott, famed for his blackface numbers. His billing as "The Original Chocolate Coloured Coon" was already impossibly dated - a sign of music hall's growing irrelevance to modern entertainment. The Empire had been sold to ATV and the Hackney Gazette predicted "drastic alterations". Worse would follow. In 1963, the Empire was bought by Mecca, converted into a bingo hall and garishly redecorated with thick gold paint.
Thank goodness for Roland Muldoon, who took over the Empire in 1986, changing his company name from Cartoon Archetypical Slogan Theatre to Hackney New Variety to reflect his desire to reconnect with the Empire's past. His programme of alternative comics from Lily Savage to Harry Enfield, black entertainment (through the 291 club) and star turns (Warren Mitchell's Lear, Ralph Fiennes's Hamlet) is the spiritual successor to music hall. And now that it has been restored to within a whisper of its former glory, the Empire feels like 1901 all over again.
· Slava's Snowshow opens at the Hackney Empire, London E8, tonight. Box office: 020-8985 2424.