Once upon a time there was a little girl who, at the age of two, had in some fashion to be told that her father had just cut off the head of the beautiful mother who used to lavish affection on her, and pretty clothes.

Shortly afterwards the child learned that, although she retained contact with him, she had been officially repudiated as her father's daughter, even if she probably had to wait a while before having it explained that this occurred because her mother had been accused both of adultery and incest.

She was sexually abused, at 14, after her father died, by a wicked stepfather who was executed a little later (although not for that misdemeanour), subsequently imprisoned by her ugly half-sister in a grim, ill-omened fortress, then placed under guard in a house elsewhere, and threatened at intervals with imminent death.

Being both a princess and plucky, she not only survived all this but grew up to become a great and resplendent Queen. Though she never married the Frog Prince of whom she was teasingly fond, or any of her other and more handsome suitors, she lived for a long time in peace and prosperity, governed her kingdom well, repelled its enemies and won the hearts and praise of most of her subjects. She has never really died.

This is at once the stuff of fairytale, and it is not. Certainly no social worker today could be blamed for feeling nervous about taking on such an appallingly victimised adolescent, or feeling pessimistic about the outlook for the case.

Even the fact that during her early years the young woman in question was becoming fluent in three languages besides her own, and reading assiduously and learning to write letters in an exquisite italic hand, scarcely counterbalances the accumulation of woes, or suggests that the sufferer might go on to negotiate adulthood with much success, let alone emerge as Elizabeth I - possibly the most politically adroit, intelligent and successful monarch ever to occupy the English throne.

Yet, during a long reign of 44 years, the daughter of Henry VIII and Anne Boleyn contrived to steer a middle course in religion between the beliefs of her Catholic subjects on the one hand and clamorous Puritans on the other (the so-called Elizabethan Settlement), evade fatal entanglements, whether marital or military, on the continent, not to mention plots against her life, see off would-be foreign invaders, and rule on the whole with remarkable acumen, clemency and tact.

Although she, too, was obliged to have a few heads cut off, she seems to have done so with reluctance, and usually under extreme provocation combined with pressure from her council. She also presided over and encouraged a spring flowering of literature and the arts that has never been surpassed.

All this despite youthful experiences that might crush the most intrepid fairytale heroine, compounded by the difficulties she later experienced in remaining resolutely unmarried in a society that for years went on pestering her to do the proper thing - select a male consort to help her govern England, and produce a child (preferably male) to ensure the succession.

Elizabeth became legendary even during her lifetime, the centre of a mythology she cannily encouraged and over which she exercised a significant degree of control. What no one, including herself, could possibly have predicted was its longevity: the way she continues four hundred years after her death to conduct, as Michael Dobson and Nicola Watson put it in this engaging book, "a posthumous progress through the collective psyche of her country".

Historians, beginning with John Foxe and William Camden in her own time and extending across the centuries to Patrick Collinson and David Starkey in our own, have examined Elizabeth's reign from a variety of angles, analysing its various subtle strategies and compromises, attempting to evaluate what it achieved.

Dobson and Watson, by contrast, are concerned less with Elizabeth's factual than with her imaginary history: the story as endlessly retold, fabricated, wildly invented and embellished by various writers, painters and film-makers, and with the changing status and interpretation across time of its central figure.

The result is a fascinating cultural history of England itself in terms of its obsession with Anne Boleyn's resilient daughter, a woman who, in addition to all her other achievements, does seem, if in rather special terms, to be living happily ever after.

As Dobson and Watson remind their readers, Elizabeth's popularity declined during her last years, partly because of the abortive Essex uprising and its tragic conclusion, partly because people were simply tiring of this old woman's long reign and hankered for a change. When that change materialised, however, in the person of James I, they became increasingly unsure that they liked it.

The story Dobson and Watson have to tell really begins with that little group of plays by Heywood and Dekker which in the early Jacobean years brought several "squeaking" Elizabeths onto the public stage to "boy her greatness" in costumes apparently based on those familiar from her widely distributed official portraits - but with a patently celebratory rather than any mocking intent.

During her lifetime, Elizabeth confronted allegorical versions of herself in a wealth of non-dramatic literature - pre-eminently in Spenser's The Faerie Queene - but she had also featured in plays. There was the Cynthia of Lyly's Endimion and Jonson's Cynthia's Revels, for instance, or the goddess Astraea mounting her throne of justice in the final tableau of Marston's Histriomastix.

She could even be asked, if present at a Court performance, to participate in the action (briefly) in her own person, as she did at the end of Peele's The Arraignment of Paris, where the three Fates surrendered their spindle, distaff and knife into her hands, and she had to accept the golden ball of discord now resolved as a tribute from Diana, her tutelary goddess.

Philip Sidney in The Lady of May, the little entertainment he staged in 1578 at Leicester's park and gardens of Wanstead, went so far as to impose an unscripted speaking part on the Queen, presumably without warning, forcing her to adjudicate between two fictional rival suitors. Elizabeth, who reputedly once declared that princes were actors who stood on a stage in sight of all the world, not only took such impromptu performances in her stride but handled them brilliantly.

From the very beginning of her reign in 1558, in her coronation procession along the streets of London, she responded actively and imaginatively, both in gestures and words, like the great actress she was, to the various spectacles and gifts ceremonially bestowed on her. It was a talent her Stuart successors signally lacked.

Dressing up a boy actor to look like Elizabeth and actually impersonate her in the public theatre (where Elizabeth herself of course never set foot) was, however, impossible during her lifetime. When Ben Jonson tried it in 1599, at the very end of Every Man out of His Humour at the Globe, many (as he had to admit) "seem'd not to relish it" - although it was a non-speaking part and highly complimentary to the Queen - and it had to be withdrawn.

Only after Elizabeth's death did it become possible to stage her in her habit as she lived. These "costume dramas", as Dobson and Watson call them, have persisted across the centuries, their most recent manifestation probably being in David Starkey's BBC television documentary on Elizabeth in this quatercentenary year of her death.

The costumes, arguably, have fluctuated rather less over time than attitudes towards their wearer. It is, however, with the latter phenomenon that Dobson and Watson are primarily concerned.

Only a few weeks after Elizabeth's funeral on 28 April 1603, her chief minister Sir Robert Cecil was saying of her that she was "more than a man, and, in troth, sometime less than a woman". As James's reign progressed, Cecil (like many others) became less and less inclined to be critical of "our blessed Queen's time", but his suggestion that she was somehow deficient in the qualities that most become a woman would be picked up and greatly elaborated later, especially after Mary Queen of Scots again became troublesome - a female rival not only "martyred" by her royal cousin in 1587 but married (several times) and a mother.

For the moment, however, Heywood's two-part play If You Know Not Me You Know Nobody represented a more typical approach: it staged the young Elizabeth's trials and suffering during the reign of her half-sister Bloody Mary, and then her generosity to the City of London and victory over the Spanish Armada.

As Teresa Grant points out in Drama Queen, an excellent essay included in The Myth of Elizabeth,*1 one of the many books about Elizabeth published in this quatercentenary year, Heywood's double bill was not only enormously popular between 1605 and the closing of the theatres in 1642, but survived well into the Restoration, when Pepys was still seeing it performed.

By that time, however, what had been a straightforward memorialising of the late Queen was acquiring a new and complicated dimension. Attention turned increasingly towards Elizabeth's imagined private as opposed to her well-documented public self, spiralling into speculations about a hidden love life - usually in terms of relations with Robert Dudley, Earl of Leicester, Robert Devereux, Earl of Essex, or even Thomas Seymour, her abuser when she was 14.

Once initiated, fantasies of this kind, which began to appear at the end of the 17th century with such prose works as The Secret History of the most renowned Q. Elizabeth (1680) or John Banks's immensely successful play The Unhappy Favourite: or, the Earl of Essex (1681) stubbornly refused, like Elizabeth herself, to go away.

They have greatly overshadowed fictional accounts of Mary Queen of Scots, partly because Elizabeth was the more important of the two queens, partly because what is actually known about Mary's personal life - the relationship with her second husband, Darnley (and possible complicity in his murder), and her awful third husband, Bothwell - is difficult to air-brush away.

Certainly, it sits uneasily with attempts (not all of them Catholic in bias) to portray Mary as the genuinely womanly woman, the innocent victim of a rival queen who was not only cruel but transgressively unfeminine.

Scandal about Elizabeth was current to some degree during her life and increased after it ended. She had even been obliged, at one point, to demonstrate clearly in the course of a public appearance that she was not, as rumoured, pregnant by Thomas Seymour.

In 1619, Ben Jonson could salaciously inform Drummond of Hawthornden that the Virgin Queen's much vaunted chastity had not been voluntary at all: her hymen was impenetrable by any man, although she had experimented in vain with several. When, by her own wish, Elizabeth's body was not opened for embalming after her death, there were some to mutter that she feared this discovery - or, even worse, a revelation that she had secretly borne children.

Dobson and Watson, however, are far less concerned with such relatively infrequent and short-lived scabrous tales than with the damage inflicted on her when she was measured, during the latter part of the 18th century, against the standard of the heroine of sensibility and then had to endure adverse comparisons not only with Mary Queen of Scots and Richardson's Clarissa but with Victoria.

She signed death warrants, galloped across the countryside in order to slaughter stags, and welcomed (it is said) on his return to court the unfortunate nobleman who had hidden himself abroad for years after letting fly an explosive fart when bowing respectfully before her, with "Ah - my lord. We had quite forgot the fart." (He went off again on his travels.)

Elizabeth almost certainly was not, as tradition would have it, actually clad in armour like Spenser's Britomart or Tasso's Clorinda when she made her famous address to the English troops massed at Tilbury in 1588 ("I know I have the body but of a weak and feeble woman, but I have the heart and stomach of a king and of a king of England too"), yet how unlike it all was to the home life of our own dear Queen.

Even 20th-century feminists have complained that, apart from declining to realise herself fully as a woman, she did nothing to improve the condition of her sex. As for parallels recently drawn between Elizabeth's character and that of Margaret Thatcher, they have rarely been flattering to either.

Dobson and Watson tell this story adroitly, interweaving it with that different but concurrent phenomenon: Elizabeth fictionalised as a lovelorn and unhappy woman compelled to sacrifice her personal life to her public responsibilities.

Whatever the ups and downs of the Virgin Queen's posthumous popularity (and they have been considerable), romantic invention never faltered once launched, and even now shows no sign of abating.

By concentrating on the Queen's sufferings in early life, or fantasising about tragically unfulfilled relationships with Leicester or Essex, an otherwise somewhat forbidding national icon could be transformed (however improbably) into a heroine of sensibility after all.

One's heart goes out to Dobson and Watson in what must have been an exhausting and also rather dispiriting trawl through what they describe as the miles of shelves in the Bodleian's repository for unwanted books which now house novels of this sort.

They have done their job thoroughly, and many of the extracts they print are both hilarious and revealing, but they must occasionally have wished that they were writing about the great Elizabethan literature and music - The Faerie Queene, Ralegh's The Ocean's Love to Cynthia, or The Triumphs of Oriana, Morley's 1601 compilation of madrigals - effectively ruled out by their decision to focus on works produced after 1603.

(It is piquant to reflect that many of the popular bodice-rippers this book unearths have a literal - if neglected and unsavoury - source in the well-authenticated anecdote about Thomas Seymour one day leading the nubile Elizabeth into the garden and, with the connivance of his wife, Henry VIII's widow Catherine Parr, scissoring off her dress.)

England's Elizabeth is especially interesting in its third chapter, Good Queen Bess and Merrie England, which traces the long history of attempts to bring charismatic royal power together with literary genius in the persons of Elizabeth and William Shakespeare, a humble subject whose work (or some of it) she had certainly seen in performances at court, but whom she is most unlikely ever to have met or privately esteemed.

This fantasy about "a golden age when royal power and literary excellence were one", as they describe it, existed independently of other celebrations, or depreciations, of Elizabeth and is still going strong. In 1998, it produced the widely distributed film Shakespeare in Love and won Judi Dench an Oscar for her brief but telling performance as the prophetically appreciative Queen. (In its most grotesque manifestation, midway through the 20th century, Elizabeth herself was even claimed as the author of Shakespeare's plays, the Bard obligingly acting as her cover.)

Their "relationship", however, goes back to 1702 and John Dennis's (unverifiable) anecdote about Shakespeare writing The Merry Wives of Windsor in answer to the Queen's command, and according to her direction, in 14 days. Once set afoot, this pleasing English pipe dream associating the great poet with the great monarch, and reflecting credit on both, proliferated wildly and has never really been laid to rest.

It can be difficult to remember that Shakespeare, characteristically averse to making specific reference to contemporaries (unlike either Jonson, or the Dekker who descanted on the name Elizabeth in his comedy Old Fortunatus), glances at Elizabeth only twice - and then sidelong. Oberon remembers a certain identifiable "fair vestal throned by the west" in A Midsummer Night's Dream, and the chorus alludes to "our gracious Empress" before the last act of Henry V. That is just about all.

England's Elizabeth is a scholarly, wide-ranging, lively and often witty book that will be read long after this quatercentenary year, which has provided its occasion, has passed. It becomes even richer, however, when supplemented by the sumptuous Elizabeth: The Exhibition at the National Maritime Museum, a book edited by Susan Doran, with David Starkey as guest curator and essays from Patrick Collinson and other distinguished contributors, which has emerged even more recently, and which will also last.*2

The wonderful music and literature created for and around Elizabeth are, perforce, omitted here, as they are in the exhibition itself (which closes on September 14). But to turn over these pages, with their beautifully reproduced images of some of the vast number of paintings, sculptures, manuscripts, jewellery, art objects and ordinary domestic things associated with her, is to understand much about the intricacy and splendour of this reign, and why she herself still fascinates.

It was said of the legendary King Arthur (from whom Elizabeth claimed descent) and of the historical Charlemagne and Frederick Barbarossa, that they were not dead but only sleeping, awaiting through the centuries an eventual reappearance. Elizabeth's posthumous existence is different.

The phoenix, an emblem increasingly associated with her during her lifetime, is a mythical bird which enjoys a long life and then miraculously and asexually renews itself from the ashes of its own funeral pyre. There is only one of it at a time, different and yet the same, but it is always around. A phoenix too frequent, Dobson and Watson must sometimes have felt, remembering the title of a play by Christopher Fry.

But Elizabeth's seemingly endless capacity to reinvent herself is something quite extraordinary. She continues, in a fashion altogether her own, to be regina quondam reginaque futura - a "once and future queen".

*1 edited by Susan Doran and Thomas Freeman (Palgrave, 280 pp., £47.50 and £15.99, February, 0 333 93083 5).

*2 Chatto, 287 pp., £25, May, 0 701 17476 5.