The death of the former Indonesian president Suharto at the age of 86 reminds us that even the most stubborn of dictatorships come to an end. Despite predictions by his ruling clique that he would lead Indonesia into the 21^st century, his term of office, which began with bloodshed in 1967, ended equally bloodily in 1998.

Although known as the “smiling general”, he had a complex character which, for most of his life, successfully deflected analysis. He was acclaimed as a man of modest origins who had taken power out of disgust at the corruption of the last years of Sukarno, Indonesia’s first president, who ruled from its independence from the Netherlands in 1949 until 1967.

For years, this myth coexisted with the public knowledge that Suharto presided over a regime in which his closest friends controlled huge monopolies and lucrative concessions, while his children acquired assets worth billions of dollars.

Under his rule, Indonesia became closely aligned with western interests during the cold war and was rewarded with aid and investment to foster rapid economic growth, making fortunes for his cronies. He favoured ambitious, but often unsound, development projects, and schemes to relocate millions of landless peasants and open up virgin forests paved the way for the country’s current environmental crisis.

Vast numbers of political opponents were killed, jailed or sent to labour camps during three decades of Suharto’s rule, with tens of thousands dying in East Timor alone following its illegal annexation in 1975.

Suharto lost his grip on power only when the Asian financial crisis of 1997 led to popular unrest over rocketing prices and unemployment, to which he had no answer except repression.

His political career ended in May 1998, two months after he had insisted on standing for a seventh presidential term and appointed a cabinet dominated by his old friends and family. The killing of six students by security forces at Trisakti University on May 12 triggered a revulsion to which even Suharto had to yield.

It was grimly fitting that a regime that began in blood with the slaughter of hundreds of thousands in an anti-communist crackdown from 1965 to1966 ended with more bloodshed. Only then could the Suharto myth begin to be unravelled.

It had been a long journey from his birthplace, the village of Godean, around 25 miles from Jogjakarta, the former royal capital in central Java.

His father was a minor official under Dutch rule, supervising water distribution to the fields, in return for which he was allocated two acres to farm. His mother had distant aristocratic origins, being descended from one of the sultan of Jogjakarta’s concubines some generations back. Suharto himself seems to have been rather unhappy, and frequently changed his name through life - a Javanese device to fend off evil spirits at a time of personal failure.

His parents separated when he was small, and he then lived with relatives. He spent some time in the house of Daryatmo, a local dukun (curer of supernatural problems), who became the first guru in his life. Such mystical guidance always remained important to him.

He graduated from high school in 1939, working briefly in a village bank, and would later claim he lost the job because his only sarong was accidentally torn and he could not afford to replace it. The alternative version is that he was sacked for stealing clothes, and was ordered by the court to join the army as an alternative to prison.

The only path forward for young men in what was then the Dutch East Indies - outside the tiny elite sent to college - was the army. Suharto joined the Royal Netherlands Indies army in 1940, and soon became a sergeant. When the Japanese invaded in 1942, the Dutch commander in chief, Lieutenant General Ter Poorten, surrendered precipitately. Any respect for the colonial power was lost.

Suharto, with tens of thousands of others from the disbanded force, joined Peta, the Volunteer Army of Defenders of the Motherland, whose explicit aim was to help Japan defend Indonesia against invasion by the western allies. In fact, nationalist leaders such as Sukarno and Mohammed Hatta used support for Japan to arouse a more general sense of anti-imperialism.

The Japanese turned ex-NCOs, including Suharto, into officers and gave them further military education, including lessons in the use of the samurai sword. Suharto’s adulatory biographer, OG Roeder, records in The Smiling General (1969) that his subject was “well known for his tough, but not brutal, methods”.

When, in August 1945, the Japanese surrender brought the second world war to a close, its forces were ordered by the allies to prevent an Indonesian nationalist takeover. However, Peta units refused to disarm, seizing control of several large towns.

Suharto led a raid on the Japanese garrison at Jogjakarta. In the official account, he is also credited with foiling a communist coup against Sukarno. In a more plausible interpretation, he supported the conspiracy when it appeared likely to succeed, but betrayed it once it had failed. Fact and myth are equally hard to disentangle in his career.

When Indonesia gained independence in 1949 after a four-year struggle against the Dutch, Sukarno became the country’s first president. Suharto, by then a colonel in the new national army, took part in the pacification of rebellious forces in South Sulawesi, where his troops earned a reputation for extreme brutality.

Suharto and his colleagues saw themselves as operators - and the army as the mechanism - to steer Indonesian society through a transition beset by militant communism and Islam. Less visible than the senior generals around Sukarno, they were waiting in the wings for the president’s uneasy coalition of Muslims, the PKI and the army to crumble.

That moment came on September 30 1965, when the PKI leader, DN Aidit (apparently acting on his own), and a small group of leftwing officers launched a botched coup in which six senior generals were killed. Suharto, who mysteriously survived, quickly suppressed the uprising.

Over the next six months, army units and local vigilante groups launched a nationwide purge of so-called communists, a catch-all label that included labour and civic leaders and thousands of others who would never have even heard of Karl Marx. Most were shot, stabbed, beaten to death or thrown down wells in acts of horrifying violence.

The purge was masterminded by Suharto, who soon persuaded President Sukarno to vest in him leadership of the armed forces, and used trusted officers to carry it out. It is thought up to 600,000 were killed.

Suharto, while professing complete loyalty to the president, quickly marginalised Sukarno. And by March 1966, Sukarno had transferred most of his power to Suharto, who became acting president a year later. By March 1968, he was formally elected president by the tame provisional parliament. Sukarno remained under house arrest till his death in 1970.

Suharto shrewdly retained Sukarno’s pancasila ideology, first put forward as Indonesian state philosophy in 1945 - the five vague principles were a belief in God, national unity, humanitarianism, social justice and democracy. He presented his own regime as a rational choice between communism and Islamism, with occasional forays against overseas Chinese business interests.

Under Suharto, Indonesia enjoyed a favourable international climate. His regime was applauded by the west for its “suppression of communism”, a policy the US covertly encouraged. It also won approval from Moscow, which had regarded the PKI’s close links with China with alarm.

Over the following decade, US oil companies invested more than $2bn in Indonesia’s petroleum industry, accounting for 90% of the country’s total production. More than 1.5 million people were “transmigrated” from Java and Bali to relieve population pressure and colonise outlying islands.

Suharto gained his biggest reward for destroying the Indonesian left when he invaded East Timor in December 1975, only a day after the US president, Gerald Ford, and his secretary of state, Henry Kissinger, had dined with him.

As secret documents obtained in 2001 by the independent Washington-based National Security Archive would reveal, Suharto asked for US “understanding if we deem it necessary to take rapid or drastic action”. In reply, Ford told Suharto: “We will understand and will not press you on the issue.”

Proclaiming a “new order”, Suharto confined domestic politics to setpiece elections contested by two federations of former parties and an army-dominated body, Golkar, which had no party members but won 60% to 70% of the vote.

It seemed a recipe for an Iranian-style upheaval, but Suharto survived the growth of discontent through the ruthless use of an intelligence apparatus. Muslim militants were jailed and social protest suppressed. More subtly, the older politicians whom he had supplanted were allowed to form an ineffective “group of 50” in 1980.

Suharto’s real talent lay in manipulating the military elite on which he relied and yet needed to divide and rule. Those he depended on most would find themselves discarded when they might threaten to become too powerful.

However, the 1990s saw a revival of labour unrest. The biggest source of dissent was a huge growth in cronyism and the blatant pursuit of financial gain by the Suharto family.

Such nepotism was not essential for the Suharto regime - it reflected his adoption of a ruling style increasingly akin to that of a traditional Javanese king. The village in which he had been born was graced with a palace, and it was ordained that he should be buried in the nearby family mausoleum, echoing the royal custom of hilltop interment.

Following nationwide protests, he resigned in May 1998, having finally lost the confidence of even his own military clique.

After a year’s silence, the former president emerged to deny claims he had amassed a fortune, filing a suit against Time magazine for publishing detailed allegations. There were suggestions he had threatened to implicate other members of the Jakarta elite if the investigation proved too vigorous.

After suffering a stroke, his lawyers claimed he was too ill to be questioned by the attorney general. In April 2000, he was banned from leaving Jakarta. He was later ruled unfit to stand trial on physical and mental grounds.

He is survived by his six children, among them Hutomo “Tommy” Mandala Putra, who served four years in prison for hiring a hitman to assassinate the judge who had convicted him of corruption.