‘I remember looking up over the DJ booth in this huge squat,” says Mario Aguero, “and seeing a sea of mattresses with people lying on them, like some kind of Guinness record attempt. Which was great until someone stood up to go to the bathroom. Then they’d be lurching everywhere.”

This was the scene at Telepathic Fish in early 90s London, and co-promoter Kevin Foakes winces as he picks up the memory. “We’d dragged quite a few of the mattresses off the street.” The influential music journalist David Toop had come along, “and his report said the first mistake he made was to sit down on a wet mattress”.

Waterlogged bedding for unwary horizontal punters doesn’t seem to suggest a key moment in British music history. But Telepathic Fish’s parties became a hub for an entirely new zone of club culture: chillout.

The word now evokes anonymous music for health spas, interchangeable Ibiza Poolside Chill or Relaxing Piano type playlists, or perhaps pranged-out ravers yammering in a decidedly un-zen superclub “chillout room”. But a new Telepathic Fish compilation, Trawling the Early 90s Ambient Underground, shows how adventurous chillout music originally was, and a wave of new events from London to Berlin and New York – some complete with duvets and pillows – are keeping Telepathic Fish’s spirit and soft furnishing choices alive.

Back in 1992 Foakes was at Camberwell College of Arts with his friend David Vallade, while Aguero had come down from the Madchester-era north and was working at a computer graphics company. They were all into the crustier end of rave, such as London institution Club Dog and squat raves by Tribal Energy and Digidub, and were living together in a three-storey house above a shop “with no neighbours, so we thought we’d throw a party,” Vallade says.

By their second event, they had a name, Telepathic Fish, and more than 300 guests paying £1 to get in (they each also got a hand-cut holographic foil fish lanyard). Their near neighbour and DJ, Mixmaster Morris, played a chillout room upstairs, stacked with old TVs, and the night was a huge hit. “That was our favourite part by a long way,” says Aguero. “It was social, fun, weird, and the music could go absolutely anywhere.”

By their next party, in mid 1993, they had a new flatmate, Chantal Passamonte – later the acclaimed producer and sound artist Mira Calix. After arriving from South Africa, she’d thrown herself into London’s music networks, working in record shops and interning at the label 4AD. “That is when things really kicked up several gears,” says Foakes. “We were just three lads doing a party, but she instantly plugged us into something much bigger.”

They graduated to a vast squatted former dole office in Brixton, and Telepathic Fish became an entirely horizontal event. “We jettisoned the dancefloor!” says Aguero. But they realised they needed something for people to look at if they weren’t dancing, so they booked Matt Black from Coldcut to be a video jockey. “We only had a vague idea what that was, and it turned out he’d never done it in public before,” Foakes says. “So it was a trial by fire, but he did it, and every party after that.”

The futurism of Black and Aguero’s graphics met low-tech stencilling, camouflage netting and those sometimes moist mattresses, all glowing under UV light for a deeply stoned crowd. Foakes says, “The best record buying advice I ever got was Morris telling me: if you see an old record with hippies and synthesisers on the cover, get it!”, and the room was duly filled with dreamy Detroit techno, proto-trip-hop and space-dub woven into film soundtracks, minimalist classical and Krautrock.

The team cite Oscillate in Birmingham and Sonora in Glasgow (run by JD Twitch, later of Optimo) as peers, as well as the chillout areas in crusty clubs and free parties. The influence of the Orb and the KLF loomed large too; Alex Paterson and Jimmy Cauty were the DJs in the ambient room at Paul Oakenfold’s club night Land of Oz. But over a series of squat events and then guest spots at clubs and festivals – plus all four of the team working at the scene’s hub, record shop Ambient Soho – Telepathic Fish became a major focus for the era’s experimentalism.

Aphex Twin played there, just as Warp Records was cementing him, Autechre and others as left-field superstars. The Ninja Tune label which Black had founded with Jonathan More – now, alongside Warp, the most important in UK electronic music – found its feet partly with Telepathic Fish as a testing ground, and Foakes became both Ninja Tune’s in-house designer, as well as releasing records under the name DJ Food. Aguero and Vallade would find success in video games and illustration respectively.

The events ended in 1995, and while chillout rooms cropped up across clubland, the concept of an entirely chillout nightclub dissipated. “It was always a cottage industry,” says Vallade: the odd squatter selling cans or cups of chai on a trestle table notwithstanding, it wasn’t really commercial in a way that could hold up against the professionalisation of club culture as the 90s wore on.

Ambient electronica started getting ever artier and more experimental, and trip-hop replaced it as the de facto stoner soundtrack. Ibiza had its own parallel chillout tradition thanks to its famous sunset sets at Cafe del Mar (plus its mixtape/CD series), where DJ Jose Padilla would play Aphex Twin alongside Ennio Morricone and Astrud Gilberto, but gradually Balearic chilling became synonymous with pedestrian beats you might hear as hold music for a multinational bank.

Thirty years on, though, the Telepathic Fish compilation emerges amid refreshed interest in cosmic sounds and laid-back events. DJ/producer Mark Barrott flies the flag for the original Ibizan chillout spirit with blissful sets at Hostal Del Torre, with names very much in the Telepathic Fish tradition such as Boards Of Canada and µ-Ziq next to Nina Simone and Mazzy Star. Elsewhere, inspired by home gatherings and after-hours sessions at London’s Brilliant Corners, with bedding included, Errol and Alex Rita of Touching Bass started ambient-leaning listening event A Loose Ting: “Making music feel really nice in a small space, a little haven for a few hours away from the rest of the world and the madness in it right now,” Errol says.

Speaking during sets is discouraged at A Loose Ting, just as it is at the private loft gatherings of New York’s Planetarium, where the audience mainly reclines. Organiser Justin Carter notes with pride the gentle rustle of appreciation you can hear at intense moments on recordings of his sets. There are no light shows or stencil art, but it does hark back to the trippiness of 90s chillout. A big inspiration for Planetarium is the use of psychedelic drugs in therapy, Carter says, “This framework where you put on an eye mask and you go into this space and you’re encouraged to go deep.” Similarly, at Planetarium, “you’re sitting with music that is like a guide or a therapist. It’s a quiet experience.”

Other events are directly inspired by the multimedia madness of 90s chillout. In Berlin, Aoife McGuinness and Jessie Dymond Barber set up Overflow, a studio hosting “sensory rave spas” full of fountains, harpists, vibrating mattresses and light installations, helping clubbers “nurture their bodies”, as Barber puts it. But Overflow is certainly not just for reverent sitting and listening, and has a sense of fun and mischief: “It’s not only very floaty, beautiful,” says McGuinness, “but brain tingly, sideways, weird stuff.”

Back in the UK, Wil Troup, founder of label and online magazine the Ransom Note, fondly remembers original 90s chillout rooms at places such as Brixton’s Fridge; his younger colleague Tia Cousins discovered them more recently at the World Unknown parties run by acid house survivor Andy Blake. Troup and Cousins’ shared love of ambient sound blossomed into their remarkable Music to Watch Seeds Grow By release series, and also into the Watching Trees micro-festival they founded with Optimo. Here, experimental music and immersive visuals – such as dappled sunlight being projected at night – give “a different type of experience” to your average rave-up in a field, says Troup. “Like, why do we have this expectation that the dancefloor has to go all night? Here people disperse, they talk, it can be a beautiful social thing in its own right.” There’s no question the mission of Telepathic Fish is alive and well in a space like this – albeit with fewer soggy mattresses.

• Telepathic Fish – Trawling the Early 90s Ambient Underground is released on 5 September on Fundamental Frequencies. The launch party is at Arch 555, London, on 31 August