The wax effigy in Westminster Abbey was so lifelike that the crowds who queued to see it on a grey winter's day were overcome. Some burst out crying; others fell to their knees. Many uttered prayers and thanks. But one visitor was so moved by grief that she attempted to kiss the figure on the lips and brush its hair forward to hide the scar on the forehead she knew so well. Before she could, sentries pushed her aside.

The waxwork was Lord Nelson, the fallen hero of the battle of Trafalgar, and the woman was his famous mistress, Emma, Lady Hamilton. Nobody objected to her trying to embrace him, but the paint on the likeness of Britain's greatest naval hero was still wet.

A few days earlier, Britain had witnessed the largest outpouring of grief ever recorded. Nelson's funeral, the first state ceremony accorded to anyone outside the royal family, lasted five days. His coffin lay in state in the Painted Hall in Greenwich's Royal Hospital before being carried upriver to the Admiralty at Whitehall and then on to its final resting place in the crypt of St Paul's Cathedral. The barge that bore it was taken from his flagship, Victory. The cortege was attended by 10,000 soldiers, 31 admirals and 100 captains, and the service lasted four hours. The nation knew that it had lost its greatest admiral, the man who had defeated both the French and Spanish fleets, but the people thought they had lost a friend and shed tears.

Instantly recognisable with his missing arm and blind eye, Horatio Nelson had become the first popular hero of the industrial age. His portraits appeared in the penny press, his exploits spawned a thriving trade in memorabilia, and tales of his derring-do were read aloud in public houses. The Naval Chronicle described the mood of the crowd thus: "There was a damp upon the public spirit, which it was impossible to overcome... the loss of Lord Nelson was more lamented than the victory was rejoiced at."

Two hundred years after his death during the battle of Trafalgar, the legend of Vice-Admiral Nelson endures. His decisive victory on October 21, 1805, commands our admiration. Above us in all senses, his symbolic presence towers 145ft on top of his column in Trafalgar Square.

This is Nelson's year Ð the time we dust our heritage out of the attic and polish it to a sheen like the family silver. The National Maritime Museum at Greenwich is staging an exhibition, Nelson & Napoleon, in July. The Trafalgar Festival, a celebration of his victory, will see a fleet review, a parade in central London, and a commemorative service in St Paul's. His funeral procession along the Thames will be re-created in an expected flotilla of 200 boats.

But just when we think we know all about the man, along comes something quite new. This month sees the publication of Nelson: The New Letters, by Colin White. Eminent among naval historians, Dr White is a Nelson scholar and deputy director of the Royal Naval Museum at Portsmouth. His book contains over 500 examples of Nelson's correspondence from archives and private collections all over the world, the majority never published before. They span the admiral's entire career, giving us new perspectives on war and love, friendship and diplomacy. And they add to our knowledge of his last days, lending a new poignancy to his final actions. "This is perhaps the closest we can get to an autobiography," says White. "His words give us the sensation of looking over his shoulder as he goes into battle. I like to think of it as Nelson in His Own Words."

So what do these new words reveal? If historical biography tells us what a man did, then this "autobiography" shows us how he did it. It adds light and shade to the man renowned as a ruthless predator and the vanquisher of Napoleon. To White, however, who has studied the admiral for 30 years, Nelson shows himself as the gentle hero of British history. He is humane and compassionate and champions the rights of his men. He worries about their pensions, buys lemon juice to keep them healthy, and frets about their wives back home. Imagine General Eisenhower, the supreme allied commander, before D-Day and Napoleon before Austerlitz involving themselves to this degree. The letters reveal Nelson to be a skilled diplomat, a gifted administrator and an inspired motivator of people. And when it came to lulling the enemy into a false sense of security, he proved a talented liar. New evidence reveals that he was able to build up an intelligence network to spy on the French and Spanish. With his ability to inspire friendship, loyalty and devotion, he won people over. He cultivated those in high places who could help his career — and those who could help him in his private life, managing his wife, Fanny, and his mistress, Emma. As with great leaders, his supreme talent lay in using the individual. So Nelson: The New Letters can be read as a leadership manual.

These documents have taken historians by surprise. Until recently, they believed that most of the admiral's correspondence was in the public domain and little remained to be discovered. That all changed after the Royal Naval Museum commissioned the Nelson Letters Project (NLP), aiming to revisit archives around the world and identify new material. As director of the NLP, White has already found 1,400 documents in over 30 locations, the best collected in this latest book. Nelson was prolific. Even writing with his left hand, he averaged 10 letters a day, while dictating many more. He rarely used punctuation, and emphasised words with capital letters. He wrote as he spoke and the result is a stream-of-consciousness effect.

Much of this correspondence was known about but omitted by historians from previous studies. Some letters to Emma were deemed too sexual, and passages excised. Others were overlooked amid the wealth of material (about 6,500 have already been published in the two centuries since his death). So White has painstakingly reinstated all the Dearest Beloveds and Sweet Kisses, thereby transforming the tone. Although some letters, often to his superiors in London, are pedestrian in the "Please send me a frigate now" way, others, such as his last letter to Emma, written days before his death — "I can only say My Love, May God Bless You and send us a happy meeting and be assured I am Ever and Ever Yours most faithfully" — are unbearably moving. But whatever their content, all merit being read aloud. Nelson was a gifted wordsmith.

White hit the headlines in 2001 when he found Nelson's battle plan for Trafalgar, a simple pen-and-ink sketch that had lain unnoticed in the archives. "I knew immediately what it was," he says. "That's when the hairs on the back of my neck stood up." The drawing shows the enemy to the right, the British to the left, attacking in two divisions. "You can see Nelson's pen has made a huge splodge where he expects to break through the enemy line, thus rendering it vulnerable to attack."

But when White turned the piece of paper over and examined the scribble on the other side, he started to see the admiral in a new light. It began: "Ralph Dixon of the Doris Transport lost an arm in carrying my dispatches wants a pension. Capt: Kelwicks son wants confirmation." The memorandum describes how Mr Bunce, the ship's carpenter, needed a timepiece, and Captain Lydiard, a frigate.

White's research showed that Nelson must have drawn up that list during his final leave in England before going back to sea in September 1805. "It may well have been written in advance of one of his meetings with his naval superiors," he says. "Given the timing just before he goes to war, I think Nelson's attention to the minutiae of people's lives is extraordinary. To an historian the memo is just as interesting as his diagram. It is the key to understanding his genius, his ability to see not only the big picture and the battle plan, but also to deal with pensions and timepieces."