Ground zero of Europe's digital explosion is the former slums of London's East End. There, among the Bangladeshi curry houses and the battered upholstery shops, is a growing tribe of young digerati who are designing and creating content for the Internet. The scene is ''counterculture meets digital media,'' explains Timothy P. Read, the 30-year-old managing director of an East End-based Internet radio station called GaiaLive Ltd.

Read and others like him have been drawn to the area by its cheap rents and sprouting alternative music and arts scene. The pioneers started settling into a warehouse district in the East End called Shoreditch a few years ago. They became known as the ''ditcherati,'' and the area itself soon gained a scruffy cachet: Designer Alexander McQueen and rock superstar Noel hang out there. With rents rising, newcomers were pushed farther east to Brick Lane, where successive waves of immigrants have labored in sweatshops.

Now, digital textile designers are as likely to occupy the workshops dotting the area as tailors. Building on London's more established Soho area, the East End has become a new digital nucleus. According to a recent government-sponsored report, 2,750 digital media companies in Britain employ more than 20,000 people and generate annual revenues of $1.5 billion. Although the East End's companies are almost all tiny startups, they may be Europe's best hope for creating the next Amazon.com.

That's not going to happen overnight. But the East End is the seedbed for some of Europe's most interesting digital experiments. Take Read's Internet radio station. In his studio, Read uses his computer to download last week's most popular cut from Gaia's Web site, a heavy drum and bass mix from the alternative record labels East Side and Metalheadz. Read says the number of ''streams'' of music that listeners download for free from his station is climbing. They grew to 75,000 in mid-January from 60,000 a month earlier. So far, the company scrapes by on corporate sponsorships, but it has just cut its first recording and hopes to sell it over the Internet under the GaiaLive label.

HIGH MORTALITY. Slightly more established is a company called Okupi. It designs interactive 3-D content for the Web, including a virtual reality tour of Lloyd's of London. Founder Simon Bore, 36, says he likes the East End because ''this area provides a great network of very skilled people'' and the rents are cheaper than Soho's. Bore expects sales to more than double this year, to $825,000 from $330,000 in 1998.

With the digital frontier constantly shifting, the mortality rate of these entrepreneurial companies is likely to be high. Finbar Hawkins, the 28-year-old founder of Bomb Productions, a 12-person startup that broke off from another Net company a year ago, has modest goals for his multimedia production house. ''We will be very happy if we are here in three years,'' he says. But with Net use exploding in Europe, at least some of these companies are likely to make it out of the East End.

By Julia Flynn in London

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