"YOU KNOW," SAYS ANDY Bichlbaum on the subject of weapons of mass destruction, "Saddam Hussein had enough botulism toxin to Botox LA for a year. Everyone in Iraq could have been young."

Bichlbaum, whose surname was appropriated from the Vienna phone book, is one of the Yes Men. Along with Mike Bonanno (surname borrowed from the crime family: "we needed protection") he specialises in a form of political pranksterism that uses spoof websites to subvert the messages of powerful organisations such as the World Trade Organisation.

They call it "identity correction". It has developed from simple stunts - swapping the voice boxes on Barbie and Action Man dolls, and putting them back on toy shop shelves, or adding kissing men to macho computer games - to something more insidious. The Yes Men will appear on news bulletins or at business conferences, willfully misrepresenting the views of the organisation they are supposed to be speaking for. The mockery will be precise: it is designed to expose the hypocrisy of corporate culture. The punchline - not always funny - is that, usually, no one reacts.

At its height, their playfulness takes them into the realms of surrealism. In the film of their activities, released in the UK this month, Bichlbaum is shown addressing a conference in Finland. The delegates believe he is a representative of the World Trade Organisation, delivering a speech about textiles of the future. First, he explains why the American Civil War was a waste of money, because of the inevitability that slavery would have been replaced by a more efficient economic model: sweatshop labour. He then demonstrates how, by using an Employment Visualisation Appendage, a manager in New York can control his workforce in Rangoon.

The Appendage is unfurled when Bonanno rips off Bichlbaum’s business suit, to reveal a gold leotard with a 3ft phallus, on the end of which is a television screen: the manager of the future will thus be able to exercise without losing sight of his workers.

Clearly, the presentation is as offensive as it is absurd, but it is greeted with nothing more than polite apathy. This, the Yes Men believe, is due to the culture of deference which surrounds corporate affairs: people will believe anything if it is told to them by a man in a suit. Certainly, that seemed to be the reaction at the International Legal Studies Conference in Salzburg, where the Yes Men suggested that the principles of the free market be extended to the democratic sphere - allowing the buying and selling of votes.

Lately, the duo has discovered that irony has its limits. Having already spoofed the website of George W Bush - prompting the president to observe that there should be limits to freedom - they loaned their support to John Kerry in the election by touring with a spoof Bush battle-bus. In the president’s case, identity correction amounted to distributing leaflets saying: "Only George W Bush has had the political courage to embrace global warming as a useful weapon in the trade wars." They also collected signatures on a "patriot pledge" petition. Signatories agreed that: "I support tax cuts favouring the elite, and I volunteer to pay more than my share of taxes to allow the elite to invest their money in our nation’s economy."

But the satire was wasted. "People didn’t notice," Bonanno notes glumly. "They just didn’t respond to the horrible things that we were saying. They agreed with us because they thought we were people with authority."

The Yes Men’s most dramatic intervention happened last December, on the 20th anniversary of the Bhopal disaster. Bichlbaum, under the pseudonym Jude Finisterra - Jude being the patron saint of lost causes, Finisterra meaning "the end of the world" - appeared on BBC News 24, posing as a spokesman for Dow chemicals, and announced that the corporation would be taking full responsibility for the disaster. The site would be cleaned and the victims fully compensated.

It was two hours before Dow issued a denial. The BBC was flagellated for its error, and there were reports that protesters in Bhopal had wept on hearing that the reports were untrue.

In the days after the Bhopal stunt, the Yes Men examined their consciences. They had been accused of giving false hopes to the powerless. Rachna Dhingra, of the International Campaign for Justice in Bhopal, called it a "cruel, cruel hoax". Later, according to Bonanno, she changed her mind, and has now formed an alliance with the Yes Men to maintain the pressure on Dow.

Whatever the merits of the prank, it did highlight several things about the way the media works. Though they are largely unabashed on the question of false hopes, Bichlbaum and Bonanno display some guilt about the fact that the BBC was made to look foolish. "They’re not meant to be a target of ours," says Bonanno. "And we don’t actually see journalists as an enemy or a problem. It’s just incidental that it ended up being the BBC."

"Nobody else could give a rat’s ass about Bhopal," adds Bichlbaum. "Only the BBC could, so they stumbled on to our site. There should not be an issue of BBC credibility here at all. They retracted it immediately and explained fully that it wasn’t real. The real issue is when a station systematically reproduces what Bush or Blair says, for months, and never corrects it. Why did we actually believe Bush when he said that there were WMDs? Why didn’t we have more of a journalistic approach to it? That’s the real question of journalistic integrity."

When they were contacted by the BBC and asked for their views on the anniversary of Bhopal, Bichlbaum and Bonanno initially considered taking a callous approach. They sketched out a "super-aggressive, honest explanation" of the company’s refusal to accept further responsibility. This, Bichlbaum says, would have shown the company as they really are, "so we did the right thing for them, PR-wise".

Bonanno adds: "The lesson is that corporations simply can’t do that. And that’s why we need regulation to keep them from doing whatever the hell they want. Corporate social responsibility is a myth that’s supposed to make us complacent. We need social responsibility to put limits on what corporations can and can’t do."

The two trace back the heritage of the prank as a political act to Daniel Defoe, who wrote a pamphlet in 1703 arguing that a bill forbidding non-Anglicans from public office was a waste of time, and that execution would be more efficient.

Satire is the easy bit. Answers are trickier. "In the movie," says Bonanno, "we suggest dismantling the WTO and replacing it with something called the Trade Regulation Organisation, whose bottom line is making sure that trade is put in the service of individuals and the environment. It seems like a straightforward thing to do. There’s obviously infinite complexity in terms of how you want to make up the rules and regulations. But often the idea of how something could be different is really simple.

"In the case of this Dow thing, the solution was easy: dissolve the assets of Union Carbide, and give it to the people whose lives were destroyed by the thing, and use the money to clean up the site. That’s straightforward. Of course, the actual process of doing that would be very complex, so it’s utopian."

"The abuse of power exists," says Bichlbaum, "and one of the things we wanted to show is that it can systematically exist, and none of the people we expect to be paying attention, none of these experts are going to be catching it. Then the question is: ‘What’s the solution?’ Is it for everybody to doubt, or is the solution simply to abolish the WTO and try to create a different structure that people can put their belief behind more reasonably?"

Since the Bhopal incident, the Yes Men have visited Switzerland. The Swiss premiere of their film took place in Davos, and was timed to coincide with the World Economic Forum ("it was fun, though we did end up getting mistakenly arrested"). It was there that they met Rachna Dhingra, who was present to give a Public Eye award for corporate misbehaviour to Dow. The Bhopal campaign will continue, and the footage of the incident will probably find its way into a second Yes Men film. Despite their notoriety, they have received what Bonanno - who currently lives in Dundee with his Scottish girlfriend - calls "further opportunities".

One stunt that will not be repeated is the golden suit. "The phallus wore out," Bonanno says, with some regret. "We had to get an erection for a photograph at the Sundance film festival last year, and because it wasn’t holding air, I ended up putting this rubberised stuff inside it, like for fixing bicycle tyres. It’s the stuff that never dries, and that didn’t hold air, so I ended up putting this spray foam in it, and it started to bleed this green goo."There’s a metaphor in there, for those who care to look.

• The Yes Men: The True Story of the End of World Trade Organisation is published by Disinformation at £10. The film, The Yes Men, will be released this Friday.