Eduardo Arroyo was determined to give his countrymen a football stadium that reinforced their Basque identity. The result, as Justin McGuirk found out, is a building that welds the region's steel-producing past to its hope of a cleaner, greener future.
"I don't like football very much – that's weird, I know," admits Eduardo Arroyo, the founder of Spanish practice Nomad Arquitectos. The hint of embarrassment is only there because Arroyo has just completed a €10m (£6.9m) stadium for Barakaldo football club. He may not be a football fan, but he can appreciate a good story, and the roots of second division Barakaldo, founded in 1917, gave him a way in to his design for the club's Lasesarre stadium.

Barakaldo is a 10-minute drive out of Bilbao, the birthplace of Spanish football. It was here, in Spain's once great industrial heartland, that English steel workers and sailors taught the Spanish to play the beautiful game. "We used to hear all the old stories from our grandfathers about how workers who came over on English ships would stop working and then draw lines in the grass to start playing this game," recalls Arroyo. This combination of industrial history and local football lore led Arroyo to believe that he could do something different in Barakaldo.

Arroyo founded Nomad in Amsterdam in 1988, and then moved it to Paris – with spells in China and Yemen – before washing up permanently in Madrid in 1995. A clue to the way Arroyo's mind works is given by the practice's web domain, The "as" stands for American Samoa and – as well as adding to the practice's exotic credentials – happens to make the address spell nomads in Spanish.

The Lasesarre stadium, won in competition in 1998, is its biggest project to date. At first glance, it has the imposing geometry of a 1930s throwback – it has an almost Bauhaus quality. But the closer one looks and the more Arroyo talks about it, the less rigid those stylised lines become. The design had two starting points. First, Arroyo wanted to make it as flexible as possible so that a building this costly wasn't being used for just 90 minutes of "male catharsis" a week. Second, he wanted to rediscover Basque football's innocent beginnings, when the locals were so close to the action that all they had to do was "throw off their berets" and join in the game.

To tackle the first of these goals, the stadium was conceived as a series of independent buildings grouped around a pitch. Each segment has its own entrance and its own services so that it is effectively autonomous and can be rented out for uses other than football. "People often have to gather in the weirdest places," says Arroyo, "so the idea was to offer them the opportunity to get together in the stadium – bands, housewives, separatist organisations …" These sundry groups can rent a 400-seat tier for an hour or for the day. Arroyo wasn't sure the idea would catch on, but rental applications have started trickling in.

The ground was made approachable by designing it in the English, rather than the Spanish, style. Seen as a whole, the segments read as one continuous tier that hugs the edge of the pitch. Seating in most Spanish stadiums is raked in three or four storeys, so that although the last row is actually nearer to the pitch than in English stadiums, it is also much higher up. Arroyo was able to do this because, as the home of a second division team, Lasesarre only needs to hold 12,000 supporters. And just in case they don't all show up, the architect used an algorithm to generate an apparently random sequence of seven colours for the seating so that it would seem to the team that its fans were always out in full force. "It gives the impression of a full stadium," explains Arroyo. "Second division stadiums are always half empty, so it's a way to support and encourage the players."

Above the stands the roof juts out in solid-looking masses that wind their way at right angles around the stadium's outer edge. Despite first appearances, the pattern is not symmetrical but rather individualised to each tier segment. From a distance, the roof looks as if it could be made of concrete but in fact it's made of polycarbonate panels. At night the entire structure lights up like an elaborate lamp, making it seem as weightless as gossamer. "That kind of Cartesian geometry always takes our minds back to the 1930s," says Arroyo, "but it's much lighter and more energetic and less solid than 1930s architecture."

The illusion of solidity is compounded by thick lighting towers rising out of the stadium corners. But, made of the same polycarbonate as the roof, they turn into frozen light beams once dusk falls. Lighting towers are often treated as awkward appendages, like giant television aerials, but Arroyo has made a feature of them. "They have the same materials and geometry as the roof, so it would seem as though they had unfolded from it. And they not only give light but they illuminate themselves. It's a way of making them part of the architecture."

Below the imposing roof, the facade is much more playful. It is made up of steel pieces welded together in a semi-transparent pattern that allows glimpses through to the pitch. The idea was to emulate the play of light and shadow in a forest so that it was as though the stadium's interior was like a clearing. "When you go through the facade, or the forest, you know something strange or different from outside is going to happen," says Arroyo. He also has a theory that a light-structured and decorative facade will discourage match violence, which he sees as linked to the way crowds react to being enclosed in a concrete bunker.

The predominant use of steel for the stadium was a direct reference to Barakaldo's steel-producing history. It also meant that the structure could just be screwed together "like Meccano". The whole construction process lasted only 20 months, and it only took as long as that because nobody had realised that underneath the site were some 19th-century steel forges that had to be drilled through to sink the foundations. The perverse result is that a building a mere 10 m high and extremely light ended up with foundations descending 40 m.

Arroyo's use of steel – both to honour Barakaldo's past and to conjure a semblance of nature – hints at the underlying motives of the whole project. The metaphorical forest of the facade is mirrored in an actual one planted around the stadium. One thousand and one trees – "One for each night," jokes Arroyo – were planted around the stadium. The reason for this was that this formerly industrial area, on the edge of town and across the Nervion River from the affluent suburbs, had been used as a chemical dump. The stadium is the first building in the area's regeneration and Arroyo was conscious that he had to bring nature back. "It's a way to make people believe in a clean future," he says.

In the end, as with all major projects in the Basque country, the stadium has taken on a political dimension. The Basque region may be the richest in Spain, but the industrial glory of its past has been on the wane since the 1980s; it has rising unemployment and the Basque identity is in need of bolstering. "We designed the stadium as an icon," says Arroyo, himself a Basque, "because I think the Basque country needs icons. It's not a nationalistic statement, but architecture has the power to make people recover hope and this is a way of saying 'let's go back to being a glorious people again'."