It's mid-January and a chill wind is blowing through Castro, San Francisco's oldest gay neighbourhood. Outside the Castro movie theatre a film crew is getting ready to shoot a scene for Gus Van Sant's new biopic about Harvey Milk, San Francisco's first 'out' politician, who was assassinated by a political opponent in 1978. Milk's murder is part of Castro folklore now, but for all the strides made by gay men in America since, and the supposedly greater tolerance these days for homosexual lifestyles, the threats, and the outrages, keep coming.

The latest is a strain of bacteria known as USA300. The codename makes it sound like a patriotic sporting event, but to judge by recent media coverage USA300 is a harbinger of apocalypse. 'Flesh-eating bug strikes San Francisco's gay community,' screamed a recent headline in the Independent. 'SF gay community an epicenter for new strain of virulent staph,' echoed the San Francisco Chronicle, a paper usually sensitive to the concerns of the city's large gay population.

One long-time Castro resident who asked to remain anonymous told the Observer Magazine: 'I have a friend who died after three bouts of this bug. I know it's a bacteria, but there's so much fear around staph now that a lot of people are afraid to get treatment.'

But as the researchers at the University of California San Francisco (UCSF), whose report sparked the recent unfortunate headlines, have been trying to explain, USA300, a virulent form of Methicillin-resistant Staphylococcus aureus (MRSA) is not exclusive to Castro, nor is it, as one British tabloid also suggested, 'the new HIV'.

The UCSF research, published in the Annals of Medicine, found that men in a clinic for HIV-positive patients who had a history of having sex with men were 13 times more likely to be infected than other groups. Dr Binh An Diep, the lead author of the study, says that perhaps he should have thought twice before talking about the strain's potential to spread into the 'general population'.

'I was using "general population" in the scientific sense to distinguish it from the group at the centre of our study - men who have sex with men,' he explains.

But though he now regrets his choice of words, Diep, 29, finds the response to the report a little puzzling. 'To be honest, we expected a far bigger reaction last year when we published a paper in the Lancet describing the genome of this multi-drug-resistant subtype of USA300 for the first time. But, except for a story on the BBC and a couple of other places, nobody paid it much attention.'

According to Diep, the new variant of USA300 that he and his colleagues have been studying differs from other bacteria, and other USA300 variants, in that it contains a 'plasmid' with a unique ability to 'self-conjugate', or leap from one bacterium to another. 'It's like a virus of a bacteria,' he tells me when I catch up with him at his laboratory at San Francisco General Hospital.

Although Diep and his colleagues have no evidence that this new variant is also spread sexually, the report speculated that the resistant clone may be associated with high-risk sexual activities, including 'skin-abrading' sex.

But while that may sound alarming, Diep says we should be far more concerned about the more common form of USA300, which has been found in many more community settings than the new variant, and which has also been linked to a host of potentially deadly infections.

'USA300 is already epidemic in the US and has been found in nine countries in Europe, including England and Wales,' explains Diep. 'So far there's no evidence that the multi-drug-resistant type we've found in San Francisco is also in Europe, but the problem is, no one had really looked. For all we know, it may already be spreading among certain high-risk groups.'

S aureus is one of the most common bacteria in nature. A single-celled-organism, its purpose, like that of all living organisms, is to eat, secrete and survive. More than a third of us are carrying S aureus right now, either on our skin or, most likely, in our nostrils. The rest of us have almost certainly harboured it in the past and will do so in the future, along with a dozen other species of staph. Fortunately, most of us will be merely colonised by S aureus, not infected by it. But in a person whose immune system is already compromised - be it by influenza, diabetes or HIV - S aureus represents the enemy at the gates. All it needs is a tiny nick or razor cut and it can cause serious infections, such as septicaemia, a blood infection that, if it isn't caught in time, can shut down internal organs one by one, resulting in toxic shock. Like another bacteria, Streptococcus, it can also trigger necrotising fasciitis - the 'flesh-eating' disease that can turn fingers, toes and limbs to goo. Then there's the big one, necrotising pneumonia, an excruciating respiratory infection that eats away at lung tissue, killing in a matter of hours.

For reasons that scientists still do not fully understand, some strains of staph are more virulent than others (researchers think USA300 can even burrow beneath the skin). Since the advent of penicillin and other antibiotics they have also been steadily breeding resistance. Indeed, hospital and nursing staff have been battling so-called 'hospital superbugs' for decades.

The first MRSA strain which is resistant to the penicillin substitute methicillin, was discovered at a laboratory in Colindale, north London in 1961. Apparently, S aureus achieved this feat (it had already bred resistance to penicillin in 1947) by importing a new resistance gene from a distant relative of staph found in squirrels. In so doing, this gene, known as the mecA gene, not only conferred resistance to methicillin but to all beta-lactams, the group which accounts for nearly half of all antibiotics used. Over the subsequent years and decades, as doctors have thrown new antibiotics at it, MRSA has continued to mutate, evolving further resistance that has enabled it to spread from hospitals to the community at large. What worries Diep and his colleagues is that of all these so-called community-acquired strains, USA300 is shaping up to be the most dangerous of all.

The first hint that MRSA had broken out into the community came in 1998, when a 16-month-old girl from a remote Indian reservation in North Dakota suddenly went into toxic shock, later dying in hospital of respiratory failure. The following year there were three more cases in which MRSA was implicated, also involving young children from rural areas of Dakota and Minnesota. At first these cases were dismissed as a Midwestern 'curiosity', but soon there were reports of other disturbing cases in the community, including not only young children, but prisoners, high school athletes, wrestlers and professional football players - any group, in fact, living in close quarters or where skin-to-skin contact and abrasions were commonplace.

One of the dangers with such community infections is that they will not be picked up or will be misdiagnosed as 'spider bites'. In the vast majority of cases, this is not serious. But in 10 per cent of cases patients may go on to develop a more invasive staph infection, and in one per cent of cases such infections result in death.

Patients with private medical insurance, who can afford good quality care and the latest antibiotics, are unlikely ever to reach that point. But for those who do not enjoy such benefits, or whose social profile or disease status (homeless, IV-drug user, HIV-positive) qualifies them for state-funded medical aid, the burden tends to fall on the public hospital system. Ironically, it was the data on these patients in the US - essentially a narrow, self-selecting group - that led the UCSF researchers to the Castro area, and to their controversial findings.

'The problem came when we mapped out postal districts in San Francisco and cross-referenced with risk factors reported to the hospital,' says Dr Henry Chambers, one of Diep's co-authors and chief of San Francisco General's infectious diseases division. 'We were looking at this from a scientific point of view and not projecting any political impact.'

Under a powerful electron microscope, USA300 resembles a bunch of yellowish grapes. The person at San Francisco General hospital tasked with discovering what is going on at a deeper, molecular level is Diep's colleague and co-author, Francoise Perdreau-Remington. The director of the hospital's molecular epidemiology lab, Perdreau-Remington was recruited from a lab in Germany in 1995 specifically for her expertise as a disease detective. Since the late Nineties she's run dozens of studies on bacterial cultures taken from patients at San Francisco General and other city health clinics, in an attempt to identify the mutations in MRSA that confer antibiotic resistance and govern fitness. It was during this screening process that, in March 2001, she became the first person to see the genetic fingerprint of the clone that would become known as USA300.

'I remember it clearly,' she says. 'I thought, "Uh-oh, we have a problem."'

By 2001, San Francisco General was treating so many boils and abscesses in its emergency room that it was forced to open a special clinic exclusively for skin infections. The clone, which at first Perdreau-Remington labelled 'S', had shown up in three cultures taken from patients who attended this walk-in clinic. But when she examined older specimens in cold storage she discovered that the first known 'S' specimen had come from a man who had visited the hospital as early as September 2000.

Perdreau-Remington shared the information with counterparts in Los Angeles County, where inmates of the largest jail system in the US had been complaining of 'spider bites'. On closer examination, these turned out to be staph, and finding the identical genetic fingerprint, Perdreau-Remington sent her findings to the Centers for Disease Control (CDC), which christened the clone USA300.

In December 2007, an outbreak of severe pneumonia in Louisiana and Georgia killed 10 flu patients, including four children. USA300 was also implicated in that outbreak. By now, Perdreau-Remington had won funding to map the bacteria's complete genome. The specimen she picked was one that appeared the most resistant to treatment - a culture that just happened to have been taken in 2003 from the wrist abscess of a 36-year-old man with HIV who was being treated as part of the hospital's 'Positive Health' outreach programme. She did not know it at the time, but the specimen was one of the very first isolates of the highly drug-resistant USA300 variant now circulating in Castro.

The gene map, published in the Lancet in February 2006, was startling. Normally, multi-drug resistance comes at the cost of evolutionary 'fitness': the bacteria survive but in a weaker, more sickly form. But the new USA300 subtype was not only resistant to six front-line antibiotics, it also appeared to have found a way of cheating the normal rules governing bacteria reproduction. The way it did this was by borrowing a piece of DNA - labelled 'acme' - from Staphylococcus epidermidis, a usually harmless species of staph which is even more ubiquitous on human skin. Diep theorises, and this has yet to be demonstrated, that the acme gene may allow the new USA300 variant to colonise many more body sites than previous variants.

But that is not the end of its tricks. The new variant also carries a 'plasmid' similar to the one which confers resistance to Vancomycin, presently one of the last lines of defence against hard-to-treat staph infections. In other words, it has the potential to become even more drug resistant than it already is.

What worries Diep, and the reason he thinks San Francisco may be at the epicentre of the emergence of this variant, is that in the UCSF study, which compared specimens from San Francisco General with those from patients at nine other city hospitals, researchers found that one in 588 people in Castro carried the new variant compared with one in 3,800 people in the city overall.

Diep says that in all the literature on multi-resistant USA300 there have been just four cases reported in women, compared with over 200 in men, mostly from the San Francisco and Boston areas. But what worries him more is that infections of the new variant could mirror the rapid spread in the community of the presently more widely disseminated USA300. 'Since we identified the first case of USA300 here in 2000 we've gone from one documented case in San Francisco to 2,150,' says Diep. 'The question for all of us is what can we in the public health community do to prevent the spread of this new type of USA300, which is already highly drug resistant and very difficult to treat,' he says.

But is the new variant really more prevalent among homosexuals, or is that just where Diep and his colleagues were able to obtain their data? Are we really in danger of being eaten alive by a new form of 'flesh-eating' bacteria? Or is multi-drug-resistant staph - whether USA300 or some other yet-to-be discovered strain - simply part of our brave new post-antibiotic world, a persistent and evolving threat to the community but, except in the case of the immuno-comprised or the very unlucky, not something most of us need to lose sleep over?

A few days after the scary headlines about USA300 being the 'new HIV', the San Francisco Chronicle ran a picture on its front page of a man with no legs. Ned Seligman, who runs a peace corps programme on the island of Sao Tome, off the north coast of South America, lost his limbs in 2004 when he picked up a virulent staph infection during a routine visit to his mother's home in Marin County, California. The MRSA infection plunged him into a coma that lasted nearly two months, attacking his heart, kidneys, brain and spine. It also caused a gangrene-like infection in his extremities that forced doctors to amputate both his legs below the knees, as well as most of his fingertips.

Seligman, who is now 59 and otherwise fit and healthy, has no idea how he contracted the bug. Nor does he know whether it was the USA300 strain (his doctor did not ask for a genetic fingerprint). But his experience suggests that once MRSA gets into the community nobody is safe. By running his picture so prominently, the Chronicle also managed to suggest that, for all the attention on Castro and USA300, MRSA was the real bacterial threat facing Americans.

That view is shared by Peg McQueary. A 42-year-old suburban mother living in Sacramento, McQueary has never visited a Castro bathhouse, nor is she a drug user, HIV-positive, or diabetic. Her MRSA nightmare began on 31 December 2005, when she accidentally nicked her leg while shaving in the shower. A week later her leg swelled up and she developed a chill, followed by a fever. Feeling 'sicker than a dog' she visited her doctor, who immediately rushed her to hospital, where she was placed on intravenous Vancomycin, a drug reserved for the most serious MRSA cases.

'I said, "MRSA what?"', says McQueary. 'I'd never heard of it.'

Since then she's been in and out of hospital and had surgery to remove diseased tissue from her back. But though she's tried drug after drug the staph keeps on returning. She's now on Daptomycin - one of the last-line-of-defence antibiotics. Luckily, the infection has not spread to other members of her family, but only, McQueary believes, because she scrubs the house religiously with bleach. Like Seligman, McQueary does not know if she has the USA300 strain, but she has little doubt that MRSA is a threat to the whole community and in her spare time runs a website, mrsaresources.com, to offer advice and support to other sufferers.

'I don't think there's nearly enough awareness,' she says. 'MRSA is everywhere. I didn't have a compromised immune system and yet I got it. All it takes is one cut or scratch.'

Getting a handle on just how big a threat MRSA poses to people living outside the San Francisco metropolitan area, however, is not easy. According to the CDC, community-acquired MRSA was responsible for 94,000 life-threatening infections and nearly 19,000 deaths in the US in 2005 - figures which include both heterosexuals and homosexuals. However, in Britain, community-acquired MRSA - as opposed to the hospital variety- infects just 150 people a year. And although recent victims range from a 10-year-old girl to an 18-year-old marine, so far there have been just eight deaths in Britain. However, some experts believe the true scale of the problem has been under-reported, which is why in March the British Society for Antimicrobial Chemotherapy, in conjunction with the Health Protection Agency, plans to issue guidelines to GPs for the first time on how to spot and treat MRSA in the community.

As Mark Enright, Professor of Molecular Epidemiology at Imperial College, London, and a leading expert on MRSA, puts it: 'We don't think it is anything like as common over here, but we don't really know because we are not looking for it.'

For all that community-acquired MRSA and drug-resistant strains of USA300 may already be epidemic in America, however, staph infections still remain eminently treatable. According to Dr Joseph Guglielmo, chairman of the Department of Clinical Pharmacy at UCSF, whose job it is to monitor the effectiveness of antibiotics used in San Francisco's public hospital system, even the most multi-drug-resistant strains still respond to some antibiotics.

The real problem, Guglielmo says, are so-called Gram negative bacteria, like Klebsiella, Acinetobacter and Pseudomonas, which produce equally nasty infections and for which there are presently few or no drugs left in the locker.

'Yes, we should be alarmed about USA300,' says Guglielmo. 'There's good evidence it can be passed back and forth in the community and, yes, it does appear to have this ability to penetrate the skin, but in most cases infections can be treated through surgical drainage.' Indeed, Guglielmo goes so far as to say it's unclear that antibiotics make any difference to the effective treatment of MRSA. But by overuse of such drugs we continue to breed further resistance.

'I remember a time when there were no resistant strains of staph in San Francisco hospitals,' he says. 'Now resistance in the community is as high as 40 per cent. To me, that's incredible.'

Last week, as I prepared to leave San Francisco for the relative safety of London, tempers in Castro were running high. Yes, it could be contracted during anal sex, community medical advisers acknowledged, but it could also be transmitted through other kinds of sexual contact, as well as through sharing towels and dirty gym benches.

What was unfortunate, and arguably unforgivable, was that the attention of the world's media had once again been focused on Castro for no other reason than that HIV-positive men leading otherwise healthy lives on antiretroviral medications, and who visited the local hospital to have their boils lanced, were among the most susceptible groups to drug-resistant staph infections.

As Hunter Hargraves, community co-ordinator of the San Francisco Stop Aids project, an outreach project aimed at curbing HIV-transmission, told me: 'Over the past 25 years, gay men have been a convenient "Typhoid Mary" for people who look to blame segmented groups as opposed to working toward a more proactive public health solution. It is too cruel, too easy and wholly inaccurate to point fingers at a community which has been historically stigmatised.'

Michael Petrelis, a local gay rights advocate and blogger, is calling on residents to remember the lessons of the early Eighties, when gay men were confronted with similar stigmatisation over Aids.

'I feel assaulted,' he told a recent meeting held at Magnet, a gay men's health centre in the heart of Castro. 'We have seen these sorts of stories too many times before. By putting out this report, UCSF has damaged millions of gay men around the world.'

Kevin Roe, a 45-year-old employee of Magnet who's been battling persistent staph infections since 1988, was less angry but keen nonetheless to convey a similar message.

'I've had boils on my hands, on my face, on my buttocks, pretty much everywhere,' he told me. 'They're hard to shift but it's not the pox, and as long as you remember to wash regularly and take basic hygiene precautions they don't spread that easily.'

There is now talk of distributing hand-sanitiser kits to local bars. There have even been calls from some Castro activists to re-open the bathhouses, which were closed by panicked City authorities at the height of the Aids epidemic in the Eighties because of concern about 'unsafe sex practices and which never reopened. (Thanks to the USA300 scare, it is argued, this could now be sold as a 'public health' initiative.)

But the wittiest commentary I saw about the report, and the one that to my mind struck the right note between concern and levity, was the sign above Magnet's premises at the corner of Castro and 18th Street.

'Stop MRSA/USA300 and save water at the same time,' it read. 'Shower with a friend.'