London 2012: Peace One Day, Derry-Londonderry

The minister for culture Ed Vaizey has said that London 2012 isn't just about London, but showcasing Britain to the world. This may be true in the simple geographical spread of events leading up to the Olympic Games, but in Derry-Londonderry's case, it ís equally about instilling a sense of civic pride. In 1991, Irish poet and playwright Seamus Heaney adapted Sophocles' Philoctetes as The Cure at Troy.

His verse on the timeless qualities of human nature seemed to exist outside the situation Derry found itself in back then, although his words on how the city would "heal" now read like a prophecy.

As well as playing host to the opening night of the London 2012 Festival, Derry-Londonderry is gearing up to become the UK's first ever City of Culture in 2013. Ebrington Square, a former barracks, played host to a huge Peace One Day concert starring Pixie Lott, Imelda May, Newton Faulkner and Jude Law - a huge symbolic statement considering that the British army's 38-year deployment only ended in 2007. Ebrington Square is set in the mainly unionist Waterside, and linked to the mainly nationalist Cityside of Londonderry by a new pedestrian Peace Bridge over the River Foyle; a curved construction designed to mimic the shape of a handshake.

The Peace One Day concert saw eager-to-please popstrel Pixie Lott (pictured right) tear through an uptempo set. Her dark rasp on "Boys and Girls" came through prouder than on any other song, but overall, her set fell short of distinctiveness: sadly, she seemed content merely to parade her stage presence. There were moments when it was all too easy to forget who was performing the songs on that massive stage.

Guillemots, however, put far more into it. Frontman Fyfe Dangerfield is a studied force of nature, and his way is to break the beauty of the songs - to push the likes of "Trains To Brazil" upwards, into the endless overcast sky overlooking the square. The band's multi-coloured layers slot over and around each other almost imperceptibly, sometimes crashing down into a symphonic ending of controlled lurches and measured distortion - reminding the audience of the power of live music done well.

Crucially, it seems the public sector is engaging with Derry-Londonderry's burgeoning culture. If you wander behind the ghostly high streets, a reinvigorated city is on parade. Culturlann Ui Chanain, a new Irish-language arts and cultural centre, resets the idea of united Irish pride. The centre's religious neutrality barely merits a mention - the poise with which the centre presents itself is inviting. The four-floor building, whose role would once presumably have been fulfilled in some dark basement, is now symbolivally visible.

The walled city is now nearly unrecognisable

Bloody Sunday and a timeline of pitched battles are far from confined to the history books in a city unable - and unwilling - to hide its emotional scars. There's no disguising that communities are still in transition, especially in the light of Newsnight's investigation last week into RAAD activity, but that's no slant on the emerging spirit in the wider city, outside of the backstreet thuggery and pockets of dissident republicanism. Looking back on the 20 years that have passed since the peace process, the walled city is now nearly unrecognisable.

The future looks even more exciting. In 2013, Derry-Londonderry will play host to the Turner Prize. Next year also sees the All-Ireland Fleadh come to the city, the biggest festival of Irish culture anywhere in the world - and the first one to be held north of the border since the festival's foundation in 1951. The City of Culture celebrations will also host the premiere of At Sixes and Sevens, a cantata by poet Paul Muldoon and composer Mark-Anthony Turnage, which will be simultaneously performed by Camerata Ireland and the London Symphony Orchestra in the Guildhalls of Derry and London. New productions by Field Day Theatre Company and Hofesh Shechter form another part of the bill, with strong rumours of a Girls Aloud reunion to fill the hearts of the city's pop fans.

Because Derry-Londonderry is still realigning itself, it's never been in a stronger position for arts and culture. Taking a chance on the popularity of wonderful establishments like the VOID Art Centre, Verbal Arts Centre and the Nerve Centre has proved wise. As such, the combination of local celebration with a renewed tourism drive should create an even more exciting city next year.

• Natalie Shaw was hosted by Discover Ireland

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