Although he stepped down as Singapore's prime minister in 1990, after 25 years in the job, Mr Lee has stayed active at the heart of government as the cabinet's senior minister. In the words of one political commentator, he remains Singapore's high priest, or oracle to whom all others turn at times of crisis or uncertainty. Yet even the seemingly indefatigable Mr Lee appreciates that his political career is drawing to a close and that it will soon be time to hand over responsibility to a younger generation.

In his memoirs, he recounts how he secured the tiny island's sovereignty, forged a common people out of a hotchpotch of nationalities and turned a resourceless outcrop into one of the world's most vibrant commercial regions. But with a certain weariness, Mr Lee admits he no longer understands aspects of the technologically-driven modern world - just as his wife remains suspicious of telephone banking. "I am not able to predetermine what shape the profile of the Singaporean in another 50 years will be," he says, somewhat gruffly, in an interview.

Mr Lee is so closely associated with the identity of Singapore that it is hard to imagine the island without him. But even when he does leave the political stage his influence will live on in the person of his eldest son, Lee Hsien Loong, who - it is universally assumed - will eventually become prime minister. The most likely scenario is that the current prime minister, Goh Chok Tong, will step down shortly after leading the dominant People's Action party to election victory next year. Lee Hsien Loong, who entered politics 17 years ago and is currently the deputy prime minister and head of the Monetary Authority of Singapore, the central bank, will then take over the top job.

Mr Lee senior has always bristled at accusations of nepotism and strongly espouses the cause of meritocracy. He says it is not up to him to decide who should lead Singapore. But he makes clear that the political succession has been well prepared and will not be some "flash in the sky" event as happens in some democratic countries.

"It's different from the American presidential system, where you say: 'I'm a peanut farmer, vote for me,' and they did. Here you've got to win the confidence of your fellow MPs, who would have many years of sitting down listening to you, arguing with you and forming their conclusions of you. It's a different system. I think it's a better system," he says, with a swipe at the US democrats who have berated him for his illiberal tendencies.

It is obvious, though, that Lee Hsien Loong will inherit a very different country from the one his father founded in 1965 and seems inclined to demonstrate a more participatory style of leadership. "The people he wants to lead are very different from the people his father led. And if he leads in the same way he will be rebuffed," says one senior Singaporean official.

On the surface, the Singaporean economic model is flourishing as never before, having proved its worth during the turmoil caused by the Asian financial crisis of 1997. Last year, the economy expanded by 9.9 per cent on the back of an export surge. The technocratic government is successfully attracting foreign investment and managerial talent into the high-technology and biotechnology fields in its quest to keep the economy globally competitive.

"The problem is that the boat sailed through so stably that some people don't think it was a very big storm," says Lee Hsien Loong, who shares his father's dynamism, articulacy and penchant for wearing windcheaters.

Yet deeper down, the island's 3 milion people appear to be experiencing a bout of existential angst, which calls into question whether the Singaporean economic model can work as successfully in the future as it has done in the past. The government is frantically trying to think of ways to make its conformist people more creative in order to produce the "knowledge products" that will dominate the new economy.

In a book of essays entitled Singapore: The Air-Conditioned Nation, Cherian George, the journalist, argues that the country's political system defies the simplistic labels of authoritarian democracy or benevolent dictatorship that have been frequently attached to it. Instead, he suggests it is better to think of Singapore as a society "with a unique blend of comfort and central control, where people have mastered their environment, but at the cost of individual autonomy, and at the risk of unsustainability."

Mr George argues that Singapore's greatest strength in closely managing its economic and social development could yet turn out to be its most fatal weakness. "In Singapore, intelligent planning should not ignore the possibility that the rapid economic development and tight political control that characterised the 1990s will be increasingly at odds with each other in the coming decade. This scenario may require a new kind of politics," he writes.

The younger generation of Singaporeans, in particular, appears to be wearying of the island's unrelenting success and seemingly yearns for a bit of the nearby jungle heat. In recent weeks the Straits Times, the leading local newspaper, has been airing a debate about the lack of national identity. One young Singaporean told the newspaper: "I can't tell a foreign friend I'm proud of Singapore just for our 10 per cent growth."

Another student, given to supporting Manchester United football club, eating sushi and steak, watching Taiwanese sitcoms and chatting with his Hong Kong friends online, could not name anything uniquely Singaporean.

Mr Lee, who survived the brutal Japanese occupation of Singapore during the second world war and has sung four different national anthems during his lifetime, sighs at the apparent frivolity of such debates. "This navel-gazing and introspection is a luxury which the younger generation - not knowing it is a luxury - have indulged in," he says.

He suggests that even a short trip abroad to Shanghai, Delhi, Jakarta or even Sydney should be enough to convince most Singaporeans of the virtues of their home state. When walking the spotless streets of Singapore - where spitting, chewing gum and pornography have all been banned - it does seem scarcely credible that only a few hundred miles away Dayak warriors are hacking the heads off Madurese migrants in the Indonesian province of Kalimantan.

However, Lee Hsien Loong, who has endured the tragic death of his first wife and a bout of cancer, suggests the third generation of Singaporean political leaders has a different set of life experiences and perspectives. This generation is beginning to reveal a "lighter touch" by encouraging Singaporeans to become more involved in the way their country is run. "Our challenge is not just to win them over but to get them engaged in politics," he says. "We may have a prospering society and economy, but to be a nation we need people to be engaged."

In his memoirs, Mr Lee recalls that when his generation first started out in politics their visceral urges were necessarily stronger than their cerebral inhibitions as they struggled for independence. But Singapore's first leader, who once described the air conditioner as the most important invention of the millennium, has seemingly succeeded in creating a society that has stripped itself of those visceral urges and revels in its cerebral inhibitions.

That may have allowed Singapore's diverse peoples to live in prosperity but it risks stunting the future development of its economy. "You can't force a man or a woman to take a risk if he or she is risk averse," says Lee Kuan Yew.