‘There are only three things happening in England,” Aretha Franklin announced to the world’s media during a visit to Britain in 1968. “The Rolling Stones, the Beatles and Terry Reid.”

I mention this to Reid and the 74-year old musician laughs. “See, I was playing a club in London,” he says, “and, down front, a young woman was really enjoying herself. I thought, ‘she certainly looks like Aretha Franklin’. But I discounted the possibility that it could be. Well, it was!”

It wasn’t only Franklin who thought the 18-year-old prodigy was the hottest thing going. The same year Jimmy Page approached Reid about singing in a band he was putting together. Reid considered the offer but declined. He kindly suggested Page check out the singer in West Bromwich’s Band of Joy, adding that the drummer was also worthy of consideration. Page took his advice, subsequently poaching Robert Plant and John Bonham.

“Lots of people asked me to join their bands,” notes Reid, obviously exasperated with discussing his decision to pass on fronting Led Zeppelin, “but I was intent on doing my own thing. I contributed half the band – that’s enough on my part!” Ritchie Blackmore would also be rejected when he invited Reid to join Deep Purple in 1969; Reid walked away from the possibility of earning vast fortunes. Yet considering the evident joy he takes in performing, he is clearly unburdened by regret. “Making music has always been a pleasure,” he says. “When I was a kid I’d get up and sing in the pub and everywhere else. My dad said, ‘I don’t think we’ve got a plumber here.’”

Now speaking on the phone from his home in the desert outside Palm Springs, Reid is getting ready to return to the UK for a September tour. He was originally raised in Bluntisham, Cambridgeshire, where one evening in 1965 his school band supported popular band Peter Jay and the Jaywalkers – Jay was so impressed that he immediately approached Reid’s father to ask Reid to join his band. “My parents were very supportive,” says Reid. “Dad just asked Peter to ensure an eye was kept on me.”

At 15, Terry immediately began a musical apprenticeship in clubs across Britain. “We were a soul band, played Otis [Redding] and Sam and Dave songs, and performed everywhere – I saw some wild scenes!” A performance at London’s Marquee club had Mick Jagger and Keith Richards in the audience: post-show they invited the Jaywalkers to join the Rolling Stones’ 1966 UK tour. “We came on first and were followed by Ike and Tina Turner – can you imagine it? This 15-piece, all-singing, all-dancing soul revue, then it was the Yardbirds featuring Jimmy Page and Jeff Beck – a total rave-up. And then the Stones. I’ve got to say this for the Stones: they always hired top support bands.

“I was 16, the youngster on the tour, and it was a blast. I’d travel on Ike and Tina’s tour bus and, after a concert, someone would start a song and they would all join in singing. I was in awe and Tina would call out, ‘Terry, come sit beside me and sing.’ She was the loudest singer I’ve ever heard. And the nicest person. Ike was a fascinating guy – he’d discuss how he came up producing BB King and other blues artists in the segregated south. I know things later soured between them but, back then, they had a good scene.”

Any tensions in the Stones camp also remained hidden. “They were all intent on playing well – even if they couldn’t hear themselves with all the kids screaming. Brian Jones was the smartest dresser and a very crisp rhythm guitarist.”

In 1967, Reid set off on a solo career, inspired by his new friend Jimi Hendrix. “We’d hang out together, play guitar – he could play anything, without looking at his hands. Jimi was just the gentlest guy but he was surrounded by freeloaders so he’d come over to my apartment in Haverstock Hill to get some peace and quiet. I’d say ‘kick them out’ but he felt he couldn’t.”

Reid signing a recording-production-management deal with Mickie Most – the maverick behind huge hits for Donovan, Lulu, Jeff Beck and the Animals – proved a mistake. Debut album Bang, Bang You’re Terry Reid from 1968 is uneven, demonstrating Reid’s huge, expressive voice and songwriting abilities yet burdened with overwrought interpretations of Cher, Donovan and Eddie Cochran hits. Most only released Bang, Bang in the US, perhaps concluding that Reid’s American tours in support of Cream and Fleetwood Mac would establish him there. In 1969, after recording his eponymous second album – featuring his most famous composition Rich Kid Blues, subsequently covered by and Jack White – Reid was again invited by the Stones to join them on tour, this time across the US.

“I had a bad feeling about Altamont and said so to Keith,” says Reid of rock’s most notorious concert. “I avoided joining them there. The tour itself had been great – it was fascinating how things had changed since the 1966 tour. Mick Taylor – he’s such a deep, fluid player – had replaced Brian Jones; audiences didn’t scream anymore, instead they listened, and we were playing stadiums, not theatres.”

But there was growing discord between Reid and Most, as their very different musical visions led to fractious disagreements. “Mickie was a hit-singles guy, but I understood that albums were the future.” Reid asked him to wait before mixing and mastering the second album, but Most went ahead while Reid was away on tour. “That was the final straw.”

Reid declared he would never work with Most again; Most refused to let Reid out of his contract for almost four years. This derailed Reid’s career but also unintentionally gave him time to develop. Atlantic Records finally intervened and on his 1973 album River, Reid discarded hard rock histrionics, instead embracing a loose, scratchy eclecticism that draws comparison with what Tim Buckley, Van Morrison and John Martyn were also then striving for.

River failed to sell but is now widely considered a masterpiece. “I was just doing my thing, mixing blues and rock and other influences. I love music, whether its Brazilian samba or Bulgarian choirs, I’m listening to it all,” Reid says. “But Atlantic didn’t really get behind me. Now people tell me how much they love River – I think it’s found its audience.”

Reid’s enthusiasm for Brazilian music developed after associating with Gilberto Gil and Caetano Veloso, the two musicians having fled Brazil’s military junta and settled in London. “They were good guys, young and very talented. Gilberto and I became close friends – I had a place in Cambridgeshire and he and all his Brazilian friends would come and stay. The local village had never seen anything like them!”

Reid also played the first Isle of Wight festival and opened the original Pyramid stage at Glastonbury’s 1971 festival duetting with Linda Lewis (“a wonderful singer”), while David Bowie offered side-of-stage support. “David was a very, very interesting guy,” Reid says. “He listened deeply and understood what I was trying to do. A real thinker. I wish I’d spent more time with him.”

So Reid was seemingly everywhere, but having relocated to California, he faded from sight. Musical fashions changed and he also had some bad luck – shortly after the release of lyrical folk/country rock album Seed of Memory (1976) his record label declared bankruptcy. Inspiration began flagging – 1979’s Rogue Waves features uninspired re-workings of Phil Spector hits – and Reid, disillusioned with both the industry and the music he was making, worked as a session musician across the 1980s. “Sessions pay well,” notes Reid, “and it’s good to check your ego and support other artists’ visions.” A mooted comeback with 1991’s Driver was scuppered by Trevor Horn’s bombastic production. “How do I feel about that album? It’s unlistenable.”

Since then Reid has released only live recordings: “I’d like to do another album but I need to pay my musicians and, right now, no label is offering a deal where I could do so.” But, loving “the challenge of being asked to help on someone else’s project”, he’s had regular employment as a sideman with everyone from Jackson Browne and Bonnie Raitt to DJ Shadow, Alabama 3 and Aerosmith’s Joe Perry. And Dr Dre, who “became fascinated with Seed of Memory and invited me into his studio where we reworked it alongside his rappers, a fascinating experience,” says Reid of the so-far unreleased sessions.

So Reid seems happy with his lot. His forthcoming British tour excites him, he says, because he loves performing for a cross-generational audience and it’s a chance to escape the California desert’s increasingly fierce temperatures. “I’ve never looked at making music as chasing fame and fortune,” he says. “I’m part of a society of musicians and I love that I can go out there and sing – it’s all I’ve ever wanted to do.”