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1981 began with three one-off releases. Sort Sol were a dark-tinged Danish band who'd already released a European album on Polygram. "Marble Station" (AD 101) and its flipside "Misguided" were Ivo's two favorite tracks from the album, and he asked the band if he could put them out as a single. The record's most enduring contribution to 4AD's history can be found on its sleeve, which features the first work for the label by photographer Nigel Grierson, soon to team up with Vaughan Oliver under the name 23 Envelope.

Sheffield's The Past Seven Days delivered a single called "Raindance" (AD 102), a dramatic six-minute slab of anthemic, guitar-driven drama that should have been the start of an interesting career. Sadly, though the band left 4AD to sign with the then-hot Dindisc label (home to OMD and Martha & The Muffins), they never released another record.

My Captains, from Oxford, were a band that Ivo had seen live, liked, and asked to make a record. The four-song 7-inch EP that resulted (AD 103) quickly faded from view and has become one of 4AD's more sought-after obscurities.

Those first three evanescent singles of 1981 were quickly followed by two debut albums of lasting merit. The Birthday Party returned with their first proper LP, Prayers On Fire (AD 104). Showcasing such classics of the band's repertoire as "King Ink," "Nick The Stripper" and "Zoo-Music Girl" it was a raw, wired and visceral document of Cave & company in peak form. The band now began to attract a fanatical following; the subsequent single "Release The Bats" topped the UK independent charts. Later in the year, 4AD issued the early single "Mr. Clarinet" (AD 114), so making it available for the first time in Britain.

Modern English expanded on the promise of their early singles with Mesh & Lace (AD 105) a memorably atmospheric album that offered a new direction for guitar music in the wake of Joy Division, PiL and Wire. It also sported the first official 23 Envelope sleeve credit, thus ushering in an artistic collaboration that would provide 4AD with a recognizable visual identity. Modern English finished off the year with the single "Smiles And Laughter." (AD 110)

Gilbert and Lewis made one final 4AD single, a chaotic tone-poem called "Ends With The Sea." (AD 106). At the same time, Ivo had become acquainted with another ex-Wire member, Colin Newman. Budgetary constraints had kept Ivo from being able to fund Newman's first solo album, A-Z (it was eventually released by Beggars Banquet) but when Newman came to Ivo with an idea for an instrumental album which could be recorded on a shoestring, Ivo agreed. Provisionally Entitled The Singing Fish (AD 108) was the result.

Expanding on the debut single of the previous year, Mass recorded what was to become their final release, an album called Labour Of Love (AD 107). The group subsequently split into two halves, with Gary Asquith and Danny Briottet going on to form Renegade Soundwave. Mick Allen and Mark Cox remained with 4AD, unveiling a new project : The Wolfgang Press.

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