The problem with history is not merely that history is bunk. Bunk we can deal with. The problem with history is that so many believe the bunk, and are persuaded by it to act and think in dangerous ways.

A perfect example is the impact on our world-view of the bunk about the Persians spouted by Herodotus, the “Father of History”, and therefore the original spreader of dangerous historical fictions. Remember that stuff you were taught at school about the noble Greeks taking on the wicked Persians at Marathon, and the chap running all those miles to Athens to announce the victory, thereby averting national disaster while simultaneously inventing an Olympic event? It never happened. Like Herodotus’s exciting account of Leonidas and his 300 spunky Spartans holding up the entire Persian army at Thermopylae, this is story-telling so florid and fantastical that Tolkien himself might have written it. Yet not only have we enthusiastically swallowed the self-serving nationalistic imaginings of the ancient Greeks, we have allowed them to shape our entire fantasy of civilisation. Which is where it stops being funny.

I read somewhere recently that the battle of Marathon was a more important event in British history than the battle of Hastings. Since the battle of Marathon was fought a few miles outside Athens, two millenniums before the invention of Britain, what can the writer have meant? He meant that by beating the Persians at Marathon, the plucky Greeks ensured the eventual triumph of the western world-view. It was at Marathon and Thermopylae that the myth was born of western reason and enlightenment taking on eastern barbarism and irrationality, and whupping them. It was in the Greek descriptions of the Persians that the ground was readied for 2,000 years of western racism and superciliousness towards the East; and the terrible seeds of conflict were sown that continue to bear grim fruit today.

I dwell on all this because it is the background to, and perhaps even the explanation for, a new British Museum display called Forgotten Empire: The World of Ancient Persia. Under the increasingly pointed directorship of Neil MacGregor, the BM is becoming noticeably keen to choose targets in the ancient world whose stories have a modern resonance. Remember last year’s Sudan exhibition, and how much light it shone on events in Darfur? This show has as its stated ambition a desire to change our perception of the Persians. As artists, architects, alphabetists, law-makers, social innovators, religious liberals and all-round good ancient eggs, it says, the Persians have been misrepresented, misunderstood and traduced. That this misunderstanding continues in our relationship with Iran today is an implication that is well-nigh unavoidable.

To prove it, the BM has created a burgundy-coloured treasure chamber for us, through which winds a tastefully twilit journey past various branches of Persian achievement. The opening room establishes the extent of the Persian empire — the largest the world had so far seen, stretching at its height from Egypt to India and beyond to central Asia — and introduces us to Darius I, the greatest of the Persian rulers. Particular stress is laid on Darius’s organisational abilities. He it was, we learn and see, who invented the concept of imperial coinage, with himself as “heads”. Under Darius, the Persians established the fastest communication service in the ancient world, a proto-Pony Express, done with chariots, that carried news across the empire at staggering speeds. Religious and cultural tolerance was another of his more impressive attitudes. Then there was his enormous appetite for art.

It was Darius who built the great city of Persepolis, from which two sizeable slabs of frieze, arranged in parallel, create a gauntlet of sculpture through which we pass at the show’s most dramatic chicane. Persepolis was one of the true wonders of the ancient world, a fabulous palace city built on a barely imaginable scale by craftsmen from around the empire. The finest frieze shows a long line of dependent races paying tribute to the Persian king: the Ionians have brought balls of wool, the Cappadocians horses, the Parthians donkeys and jars. An impressive assortment of subject peoples seemed to coexist happily enough in Darius’s empire. Learning to tell them apart is one of the show’s pleasures.

Persian sculpture is distinguished by a taste for precision, a lightness of touch, a sense of fineness and a fascination with detail. More naturalistic than the Egyptian sculpture that it assimilated, less naturalistic than the Greek art that succeeded it, it invariably arrives at far more delicacy than we might have expected from the dark and bloodthirsty warmongers described by Herodotus. Persepolis was razed to the ground by Alexander the Great: who was the barbarian in that exchange? The surviving fragments on show here are intermittently impressive. But I craved more.

Back in the opening gallery, there’s an imposing life-size statue of Darius, or rather of his lower half, minus the head, which I took to be real, but which turned out to be a plaster cast created specially by the Tehran Museum. There are many such plaster casts on the journey: the two parallel friezes from Persepolis are casts as well; the entire show is a most mar- vellous advertisement for the skills of the plaster-cast-maker. But imagining Persepolis is not nearly as satisfactory as enjoying its true textures. It is among the smaller, more portable types of treasure — the drinking cups and amulets, the jewellery and figurines — that the show encourages proper aesthetic bliss. A gold drinking horn with a lion’s head vies with a life-size golden fish for the title of most gorgeous thing on display.

The delicate negotiations that have been continuing with Tehran for several years over loans to this show, particularly of material from Persepolis, were disrupted recently by “events”: the recent election in Iran of a hardline president and the resumption of Iran’s nuclear programme. It was touch and go whether Tehran would send anything at all. In the end, various small and wonderful treasures were released — among them the famous Cyrus Cylinder, which Persian propagandists like to describe as the first human-rights document — but not the larger and more imposing examples of Persian sculpture that would have brought the show the quality it most misses: grandeur.

The aim here is to rescue the Persians from the lower shelves of civili- sation and reinstall them on the top shelf alongside the Greeks, where they belong.

It is a splendid ambition that, alas, requires a more splendid show. Looking at plaster casts and learning from video screens is informative, but it simply does not bring with it the same aesthetic flutter that confronting actual treasures achieves.

Another problem is the exhibition space itself, which is too small and cramped to inspire proper awe. Every time I enter the great waste of space that is Norman Foster’s Great Court, with that silly theme-parked version of the BM’s famous Reading Room at the centre, I wish the museum could lavish that sort of scale on its exhibitions. Until it does so, it cannot hope to match the Royal Academy in impact when it comes to the delight ful and crucial business of reassessing ancient civilisations.

Forgotten Empire: The World of Ancient Persia is at the British Museum, WC1, until Jan 8, 2006