This Christmas Day Chutney Mary, a glossy upmarket Indian restaurant in London's Chelsea, will be serving, among other things, pot-roasted duck and a coconut pudding called Bibinca. Both are from Goa, a region of India with, appropriately enough, a pronounced Christian population. It is a mark of how far we have come.

Once upon a time in Britain there was just a thing called Indian food, which existed oblivious to the fact that India is a country of 17 different states each with a distinct cuisine (plus the separate cultures of Pakistan, Bangladesh and Sri Lanka).

'I think people finally have got an understanding that there are various regional cuisines,' says Camellia Panjabi of Chutney Mary. 'And it's all to do with travel. They have visited places like Goa and Kerala.'

We can blame our longstanding ignorance about food from the Indian subcontinent on our colonial forebears; Britain's imperialists might have been good at invading and exploiting but they weren't hot on cultural diversity. It was just one place: India. And they had just one dish: curry.

On the other hand we should also be grateful to those merchants of the East India Company who, from 1608 onwards, prompted increasing numbers of Asians in this country and with them the first Indian restaurants. According to Curry, Spice and All Things Nice, a history of ethnic restaurants in Britain by Peter and Colleen Grove, the first was the Hindostance Coffee House, which opened in London in 1809.

But the Hindostance was the exception. As with Chinese restaurants, most Indian eateries were community cafes down by the docks. The real growth began with the opening in 1911 of the Salut e Hind in Holborn and, in 1927, by the arrival of Veeraswamy off Regent Street, (still going strong and now owned by the same group as Chutney Mary). By 1960 there were 500 in Britain, while the arrival in 1964 of the tandoor oven - imported into India from the Middle East after World War II - helped lift numbers to 1,200 by 1970.

In India itself, a place where cooking only happened in the home, it had been independence in 1947 that created the country's first restaurant businesses as displaced and enterprising Punjabis enthusiastically set up India's first restaurants. In the early 1970s history repeated itself: the bloody war that led to the creation of Bangladesh again created huge numbers of refugees. This time thousands of them headed for Britain.

'The Bangladeshis created the Indian restaurant market in the UK,' says Amin Ali, owner of the highly regarded Red Fort in London's Soho, who was part of the influx in 1972. 'Without the Bangladeshis the wave of smart Indian restaurants we are experiencing now wouldn't be here.' By 1980 the number of restaurants had jumped to 3,000. By the the millennium it was 8,000. It is now a £2 billion a year business that employs over 70,000 people.

One of the reasons for that success was the willingness of restaurateurs to adapt Indian food to British tastes. By creating dishes like chicken Madras and lamb vindaloo, neither of which bears any resemblance to similarly named dishes in India, an easily approachable shorthand was developed. Madras meant hot. Vindaloo meant bloody hot. It was no more sophisticated than that.

The greatest invention, of course, was chicken tikka masala, for which dozens of people have claimed credit. 'I have been trying to get to the bottom of that one for years,' says Peter Grove. One claim goes back to the Taj Mahal restaurant in Glasgow in the Fifties; another to somewhere in deepest Essex. Either way, the story is always the same: that it was the result of an enterprising chef pouring a tin of condensed tomato soup over a dish of chicken tikka and then spicing it up, in an attempt to appeal to Britain's desperate enthusiasm for gravy. It has become so popular, indeed so ubiquitous, that we have even exported it. 'In the last two or three years,' says Amin Ali, 'chicken tikka masala has actually started turning up on the menus of the top hotel restaurants in India.'

In 1982, despite huge scepticism, India's Taj International Hotels group opened the Bombay Brasserie, this country's first quality Indian restaurant. It was a huge commercial and critical success. Subsequently Britain saw an influx of chefs trained up both by the Taj and Oberoi hotel groups, who have taken Indian food to new levels. The awarding in 2001 of Michelin stars to both Zaika and Tamarind confirmed this.

And yet, of course, the Zaikas and Tamarinds and Chutney Marys are still the exception rather than the rule. In 1998 the then editor of Tandoori Magazine, Iqbal Wahab, accused most Indian waiters of being 'miserable gits'. He had to quit his job such was the outcry, but went on to open the much-praised Cinnamon Club.

'Things have moved on since I wrote that piece,' he says, 'or at least they have in London. But elsewhere I'm afraid all that's happened is we've gone from bowls of brown stuff to bowls of slightly nicer brown stuff.' Hardly the most attractive of assessments, but it is unlikely to dent our enduring love affair with Indian food.

Number of Indian restaurants in Britain...8,000

Annual turnover... £2 billion.

Number of people employed... 70,000

Number of Indian meals consumed annually... 70.3 million

Five to try:

Bilash Tandoori (Bangladeshi)

2 Cheapside, Wolverhampton

(Tel 01902 427762)

Gifto's Lahore Karahi (tandoori roast meats)

162-164 The Broadway, Southall, Middx

(020 8813 8669)

Sarkhels (traditional regional Indian)

199 Replingham Road London SW18

(020 8870 1483)

Chutney Mary (modern)

535 King's Road, London SW10

(020 7351 3113)

Sharmilee (Gujerat vegetarian)

71-73 Belgrave Road, Leicester

(0116 261 0503)

The great fakes:

Chicken vindaloo

Lamb Madras

Chicken tikka masala

Try these instead:

King scallops poached in coconut milk

(From Zaika, 1 Kensington High Street, London W8; 020 7795 6533)

Crab claws, with black pepper, garlic and butter (From Chutney Mary)

Goan tiger prawn masala (From Bilash)