It was a hot summer's Sunday in 1908 and Revere Beach, in Boston, USA, was packed with the usual crowd making the most of the weather. Young ladies were promenading up and down the sand in their fashionable bathing dresses - complete with sailor collars and bloomers - throwing aside their sense of modesty and showing their calves to the appreciative men. Suddenly, there was a commotion. People began pointing, women started screaming and parents hurried to cover their children's eyes. "Shame on you!" they cried.

There on the shore stood a confident young woman, resplendent in a man's bathing costume - a skin-tight one-piece black suit with legs that ended well above her knees. She was about to wade in to the waves when a policeman strode across the beach and charged her with indecency. Annette Kellerman had arrived in America.

The 21-year-old Australian couldn't understand what all the fuss was about. Later, pleading her case in the courtroom, she argued that she was being practical rather than provocative in choosing such revealing attire. After all, she explained, if she were to swim in the customary garb of her day, she "may as well be swimming in chains".

So who was this woman who dared to bare her body in public in an era of prudishness; this freethinker who held such radical opinions about what women were capable of? A modern-day Venus worshipped around the world for her beautiful body and boldness, Annette Kellerman was a distance swimmer, diver, theatrical performer, mermaid, feminist, fitness advocate and soon to be internationally acclaimed silent-movie star.

Born in Darlinghurst, Sydney, on July 6, 1886, the woman who would later be dubbed "perfect" had an inauspicious start to life, unable to stand upright on her bowed legs. At the age of two, she was diagnosed with rickets and wore heavy iron braces to correct the condition. To escape the physical pain of the braces and the social isolation resulting from her disability, young Annette frequently found solace in her imagination. Her natural theatricality was fostered by her French-American mother, Alice, a bohemian socialite and talented pianist who turned their home into a conservatoire with Annette's father, Frederick, a violinist.

When she was seven, a forward-thinking doctor suggested taking off her braces and encouraging the girl to swim as a treatment. It was a decision that would change the course of Kellerman's life. With grim determination, she joined her brothers, Maurice and Fred, and sister, Marcelle, in the water, and was thrilled with the progress she made. "Only a cripple can understand the intense joy that I experienced when, little by little, I found that my legs were growing stronger and taking on the normal shape," she later wrote in her memoirs. "After I learnt, I'd go swimming anywhere, any time, at the drop of a hat."

Kellerman was hooked on the sport and as her fitness improved, she began to swim competitively. At 15, she was beating the men in sprint races and also set a new world record over one mile. She was fearless and, mesmerised by local boys diving off high platforms into her favourite harbour pools, the teenager accepted a dare to join them. She felt there was nothing she couldn't do.

When the Kellerman family hit hard times, they moved to Melbourne and their athletic daughter found an unusual job. During a visit to the local aquarium, her sister joked that she should dive in with the tropical fish. Kellerman did exactly that, while Marcelle went around with a hat, collecting money. The delighted staff invited her to perform her "mermaid act" regularly. So the budding star, in a glittering fish's tail, used her incredible capacity to hold her breath underwater and attracted hordes to her display. The money she earned helped to support her family but offended her mother's cultural sensibilities. Kellerman said later, "My mother was upset when my first job was swimming around with eels and seals in the aquarium." It would be many years before she felt she truly had Alice's approval.

By 1904, 18-year-old Kellerman was a local celebrity known for her mermaid antics and long-distance swimming feats. It was time to broaden her horizons so, along with father Frederick as chaperone and manager, she sailed to England. Their arrival was less than triumphant, and the 40 pounds they arrived with soon dwindled to nothing. Living in cheap accommodation in London's King's Cross, the pair needed to do something dramatic to attract some publicity. So Kellerman decided that she would swim a section of the Thames.

At the end of June 1904, the Australian dived into the filthy river and began the 42-kilometre swim - something no man had ever accomplished, let alone a woman. As the word spread, crowds flocked to witness the spectacle. The next day, she was front-page news and The Daily Mirror soon christened her the "Australian Mermaid".

Stunt after incredible stunt followed - including swimming the British coast, racing men down the Seine in Paris and performing an underwater ballet in London's Hippodrome theatre, in a huge tank. Kellerman quickly became the darling of society - even entertaining royalty. Only the English Channel defeated her. On three separate occasions, she attempted to swim across it and failed.

In 1907, Kellerman headed to Chicago, where she thrilled crowds with her tiny costumes and exhilarating dives. As the Australian Mermaid, she was the highest paid vaudeville star in the US. She was so popular that her now ailing father appointed a manager, Jimmie Sullivan, to handle her engagements and keep the bevy of admiring men at bay.

He did all of that - and more. Quiet and smart, and unable to swim, Sullivan became Kellerman's lifeline when Frederick returned home and following his death shortly afterwards. The friendship quickly turned to love. Sullivan helped Kellerman move to Boston, where she was a star attraction at the vaudeville fair beside Revere Beach. He stood by her when she was later arrested for indecency.

The scandal attracted the attention of Harvard University's Professor Dudley Sargent, who had been researching the female body for 25 years. Kellerman allowed the professor to measure every centimetre of her superbly fit body and was thrilled: 163cm tall, with a 66cm waist and an 84cm chest, she was the first woman in 10,000 who closely mirrored the measurements of the Venus de Milo. Dragging her on to the stage at Harvard in her bathing suit and parading her before his gaping young male students, the professor declared her the "Perfect Woman".

The moniker sent her profile skywards, but Kellerman was characteristically modest, cautioning that she was not perfect - only perfectly healthy. "I do not want to be known as just a pretty fish," she lamented.

Kellerman's star was rising, and in Sullivan, she had found someone to share her unconventional life. They married in 1912 and began a partnership that would last 60 years. "He was a true partner, a real friend and the finest husband a woman ever had," Kellerman wrote of her soul mate in her memoirs.

By 1914, she'd become a movie star, playing the lead in the underwater fantasy. Neptune's Daughter, which packed out cinemas for weeks. "I'm tired of flopping into tanks," Kellerman told one journalist. "I really am an actress and I enjoyed acting in Neptune's Daughter, even if there is a lot of swimming in it, because this trained seal stuff gets on one's nerves."

Rich, famous and finally recognised as an artist, Kellerman couldn't ask for more. But her success was tempered by loss when her mother became seriously ill. Kellerman was intent on sailing to Alice's bedside in Paris, where she now lived, to show her the negative stills of her first feature film. "It was a great moment in my career that I had finally proved to my mother that I had inherited her artistry," she said, her need for approval satisfied at last. Within three days of Kellerman's arrival, Alice passed away.

Neptune's Daughter was followed by the world's first million-dollar movie, A Daughter Of The Gods. This extravagant production was filmed in Jamaica in 1916 and featured 150 "mermaids" trained by Kellerman. She fearlessly performed stunts so reckless that some, such as diving among crocodiles, were kept secret from her husband until after they had been completed.

"She never had a double," recalls Barbara Firth, Kellerman expert and co-author of her biography, The Original Million Dollar Mermaid. "She survived because she was a perfectionist and completely without fear. People were shocked and thrilled by her because what she did was so exciting. She had a superbly coordinated body that she regarded as her instrument, that she developed and looked after. She was a vegetarian and teetotaller."

Kellerman became an adept businesswoman. She gave lectures on health and fitness - unheard of in those days. To prove the effectiveness of her methods, during her lectures she would matter-of-factly split open her dress with scissors to reveal that she was only wearing a "natural corset". She also penned the first ever diet and fitness book, Physical Beauty: How To Keep It, and designed and marketed the first modern swimsuit for women, adding a short skirt to her scandalous one-piece suit to acknowledge the modesty of the day. "She devised exercises for women to incorporate into their housework and made drudgery fun," says Firth. "She told women to find their talent. Women at first envied her - then they loved her."

So did the men - especially when she appeared in posters promoting A Daughter Of The Gods, naked but for the hair cascading over her breasts and pubic region. In an era when women rarely undressed in front of their husbands, Kellerman was a revolutionary. Yet she held true to her vow that she would not depend on her body alone for admiration, and it was her courage, captured on camera, that inspired her audiences to believe in women's liberation. It seemed there was nothing she couldn't do - dive from a moving plane into the sea, walk a high wire across a waterfall in California's Yosemite National Park, box, wear dungarees in public and be one of the first women to own and drive a car. "She was simply ahead of her time," insists Firth.

Kellerman turned down a five-movie deal with Fox to pursue her first love: theatre. She continued to tour America - and, briefly, Australia - until dwindling audiences marked the end of vaudeville in the US. In her 40s, Kellerman performed throughout Europe, where she mingled with the likes of Coco Chanel and Grace Kelly. In 1937, she returned to Florida, appearing in charity performances and advising President Roosevelt on exercises for his polio-affected legs.

But her own fame was fading, and in 1939, she and Sullivan moved to Newry Island on the Great Barrier Reef. Legend has it that she swam the shark-infested waters to nearby Rabbit Island to do her shopping, before hitching a ride back on a boat. When World War II broke out, the pair set up a touring show to raise money for the Red Cross.

After the war, the couple sailed back to the US. The release of the 1952 film The Million Dollar Mermaid, based on Kellerman's life, put her back in the spotlight. But she took a dim view of Esther Williams, the actress chosen to play her. "Esther is more beautiful," she said, "but from the neck down, I concede nothing." Williams later speculated that Kellerman was jealous she had not been offered the part herself, despite being 65.

After the hype died down, Kellerman and Sullivan returned to Australia for good. Clad in a full-length body suit, she continued to swim daily, to the bemusement of Gold Coast locals, who had no idea who she was. She believed that, with exercise and diet, her body would never fail her, and her fitness did defy her years: Barbara Firth remembers Kellerman being so supple that, two months before her death at the age of 89, she could bend from her waist to the floor with perfectly straight legs to pat her cat. "She could not accept the limitations of ageing," says Firth.

On November 6, 1975, three years after her husband died, time finally caught up with Kellerman. Her ashes were scattered over the Great Barrier Reef to reunite her with the sea, as she had requested. A fitting end for someone who once said, "The man who has not given himself completely to the sun and wind and cold sting of the waves will never know all the meanings of life. I still wait to see my first real mermaid sitting on a damp grey rock combing her long green hair."

The Original Million Dollar Mermaid by Emily Gibson with Barbara Firth (Allen & Unwin, $29.95) is available from good bookshops.