Few rock stars can claim to have been pushed on to the path of musical glory with specific instructions from the Dalai Lama. If it wasn't for the advice of the spiritual leader of the Tibetan people, Phil Void might have found himself a scholar today, rather than the singer-songwriter of the Dharma Bums.

The artist once known as Philip Hemley – he was given the name Phil Void by a Tibetan oracle – has been coming to Dharamsala, the seat of Tibet's government in exile, since 1975, the year he formed the Bums. But it was his 1989 visit to the Indian hill station that changed his life.

Although Void has had many audiences with the man everyone around here refers to as "His Holiness", their meeting that year, after a full initiation rite, was crucial. The Dalai Lama reduced the number of mantras Void was required to recite from 500,000 to 100,000 and then gave him important career advice.

"I said that when I went back to the US I had to decide what to do. Should I study for my PhD or keep going with music? I presented him with the original version of my notes for 'Rangzen' and he looked at me with a funny smile and a look that bore right through me. His Holiness said: 'You have a special talent for these songs.' I knew what decision I had to make."

Void had written "Rangzen", which translates as "Free Tibet", on his way to Dharamsala. It would end up being the Dharma Bums' signature tune.

"And who will sing the songs to be sung, and speak the name on every tongue, and fight with words though they have guns, and lift the yoke upon us," runs the song. It calls for a return to harmony and for independence, but as Void points out, this was long before there was any tension between the idea of a "Middle Way" and of autonomy, the subject of last week's meeting in the city.

The group's first major gig was at the Tibetan Institute of the Performing Arts in 1989. When the curtain pulled back, the front rows were a sea of maroon robes as monks packed out the hall to hear the music. "The kids went berserk. Every time I go to Tibetan events around the world, a Tibetan will come up to me and say they saw that gig," Void says.

The Bums' hippie pedigree is impeccable; they take their name from the Jack Kerouac book of the same name and songs in their repertoire include "Winds of Karma" and "Ocean of Wisdom".

Dharamsala has a population of 20,000, of which a few hundred are foreigners, but with his distinctive bushy beard, booming laugh and twinkling eyes, the man from Woodstock is probably the most recognisable of the overseas hordes.

The foreign contingent divides into three groups. The original hippies, blissed out on the mysticism of the Himalayan town; the shaven-headed Tibetan Buddhist monks from Europe or the US attending Dharamsala's temples; and the tech-savvy students working for the Tibetan independence movement.

Dharamsala was established as a garrison town in the 1850s under British rule. Plans to expand its role were shelved after an earthquake in 1905 in which 20,000 people died. Colonial-era heavyweights are buried there, such as Lord Elgin and Francis Younghusband, an explorer with mystical leanings who led a British invasion force in 1904 that massacred hundreds of Tibetans.

It was a sleepy place until 1959, the year the Dalai Lama and his followers fled Tibet after a failed uprising against the Chinese, who had entered Lhasa in 1950 and deprived the Dalai of a base. A Dharamsala shopkeeper wrote a letter to India's President Nehru suggesting his town would be a good home for the Tibetan government-in-exile, and so it settled there.

It was relatively easy to gain an audience with the Dalai Lama in his new home, so hundreds of pilgrims from all over the world began to visit. One of them was Phil Void.

The pilgrimage has become easier since then, with roads improved and an airport built. But the Dalai Lama no longer greets every traveller. He does, however, grant an audience to all Tibetan exiles who take the risky route over the mountains to escape.

Yet when the Dalai Lama spots Void at a gathering, he will walk over to tug his beard. The prime minister of the Tibetan government-in-exile, Samdhong Rinpoche, has also been known to give the American's grey-flecked beard an affectionate pull.

The singer is disappointed the Dharma Bums have never made the front page of Rolling Stone magazine, but he has received better kudos; the Dalai Lama wrote of the band, in a letter of support: "They have sought at every opportunity to draw attention to the cause of Tibet and to sing up for the freedom of the Tibetan people, for which I thank them."

Richard Gere listens to their songs and Blondie's Chris Stein has played with the band. Other Bums collaborators include Maura Moynihan, a journalist, activist and singer-songwriter who first jammed with them in 1989. She is the daughter of the Democrat senator Dan Moynihan, who was the US ambassador to India under two administrations and was instrumental in forming Washington's policy in Tibet.

In a travel shop, two Tibetan Buddhist monks warmly embrace Void and say they are delighted at the way foreigners are helping them. "They play a very important role in the independence movement. We know him from Voice of America and we love his performance," said Rigzin Paldup, from the International Buddhist School of Dialectics in the town.

Void reels off the festivals his band has played at, including the Miss Tibet beauty pageant and a 2005 performance at Madison Square Garden in New York after a Dalai Lama teaching. He remembers with fondness one concert which thousands of Tibetan refugees attended.

"They were all at the fence and I started singing and they went berserk. There were 100,000 people at the festival and by the time I got to the third chorus the refugees were all singing with me," Void recounts. And with that, he bids farewell and heads into town, to arrange the next gig.