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Christa Wolf's identity as a writer living in the communist German Democratic Republic was informed by the traumatic experience of Nazism. Though born in 1929, and therefore a child during Hitler's rule, she was never, as she put it, "able to feel exempted from responsibility, but only horrified at how a system of delusion can seduce people into hatred for mankind".

In order to prevent a recurrence of the Nazi tyranny, Christa Wolf wanted "to hunt for alternatives to these steps towards ruin, however frail the alternatives may be, however utopian they may appear". The answer, in her view, was socialism. From the 1960s she came to be viewed (in the GDR) as a "loyal dissident" and (in West Germany) as a "socialist of independent temper", critical of the GDR regime but maintaining her belief in socialism as superior to western capitalism.

Her second novel, Nachdenken über Christa T (The Quest for Christa T, 1968), was first banned in the GDR, then published in a limited edition. The book explored the development of a woman's individual personality and conscience within a socialist society geared to productivity and universal norms, and showed how hard it is to be oneself in a society where "conformity is the means of survival". The novel became the focus of heated critical debates in both Germanies, but began a new direction in GDR literature with its emphasis on "subjective authenticity".

Christa Wolf was prepared to take some risks in the cause of artistic freedom. When the poet and songwriter Wolf Biermann was deprived of his GDR citizenship for criticising the regime, Christa Wolf was among those who initiated a public protest. She bravely stood up and objected to an artistic purge at the party conference in 1965. But she did not leave the GDR, even though she was allowed to travel abroad regularly. It seems that the regime found her more useful than dangerous; she had private one-to-one chats with Erich Honecker, and between 1963 and 1967 was a candidate for the Party Central Committee.

Christa Wolf clung to her socialist ideals through thick and thin. In 1989, even as her fellow citizens were fleeing the country in droves, she appealed to them to stay and help build "a truly democratic society". It was, she wrote, "more difficult but also more honourable to stay in the socialist Fatherland".

The fall of the Berlin Wall marked a dramatic change in her reputation. Her opposition to reunification brought accusations that she had played into the hands of the tyrants of East Germany, and many critics found it astonishing when, in 1990, eight months after the end of communism, she published What Remains, a thinly veiled autobiographical short story in which she described the fears and thoughts of someone who is under observation by the Stasi, the East German secret police.

She had written it in 1979 but kept the manuscript in a drawer until 1989, when she revised it before sending it for publication. Many felt that her cri de coeur had come too late.

The controversy became fiercer still in 1993, when Stasi documents came to light showing that Christa Wolf had indeed been one of the millions who were spied upon.

But they also revealed that, despite her claim that she had never co-operated with the Stasi, in 1959 – eager to serve the "anti-fascist" cause – Christa Wolf had allowed herself to be recruited as a secret informer.

Her collaboration ended in 1962, when the Stasi dropped her because she was not deemed sufficiently helpful. The Stasi dossier on her and her husband was registered under the revealing code name "Double-tongued".

The West German press duly lambasted her as a stooge of the GDR with all the intensity with which they had once praised her as a symbol of heroic integrity. Kinder spirits concluded that she was merely an example of the muddle-headed German idealist who, in some respects, posed more of a threat to Germany's post-war liberties than the jackbooted fascist.

She was born Christa Ihlenfeld in Landsberg an der Warthe in the province of Brandenburg (now Gorzow Wielkpolsky in Poland), where her parents owned a grocery shop, on March 18 1929.

At the end of the war her family fled to Mecklenburg in what became the GDR, and Christa attended high school at Gammelin, near Schwerin. She completed her schooling in Bad Frankenhausen and joined the SED (Socialist Unity Party, the governing party of the GDR) in 1949. From 1949 to 1953 she studied German Literature at the universities of Jena and Leipzig; she married her fellow student, the writer Gerhard Wolf, in 1951.

From 1953 to 1957 she worked on the staff of the Deutscher Schriftstellerverband (German Writers' Association), then as chief of the editorial staff of the publishing house Neues Leben and, in 1958-59, as editor of the journal Neue Deutsche Literatur. In 1962 the Wolfs moved to Kleinmachnow, near Berlin, where Christa began writing full-time.

Her first novel, Der geteilte Himmel (The Divided Heaven, 1963), about the love between a student and a chemist which cannot survive the conditions of divided Germany, was awarded the Heinrich-Mann Prize and brought its author recognition in the West as well as in the GDR. She received the National Prize for Art and Literature and was nominated as a candidate for the Central Committee of the SED.

In Kindheitsmuster (Patterns of Childhood, 1976) she traced the origins of present-day German thought patterns to life in the Third Reich, showing how her own childhood had carried on along normal lines while Jews travelled on trains through her town to Chelmno and Treblinka.

In Kein Ort. Nirgends (No Place on Earth, 1977) she chose figures of the German Romantic period to probe "the connection between despair of society and literary failure". In Kassandra (Cassandra, 1983) she examined the origins of war in the patriarchal culture of the Greeks.

By this time she was allowed to travel abroad by the GDR regime to give lectures and accept awards, among them the Büchner Prize of the German Academy of Language and Poetry (1980); the Austrian State Prize for European Literature (1985); and the Geschwister-Scholl-Prize of the city of Munich (1987).

The events following the fall of the Berlin Wall plunged Christa Wolf into a long depression, as her long-held belief that the people of the former GDR were less venal than the citizens of the West was tested to destruction.

In 1993 she published Medea, a version of the ancient myth in which the woman whose name has become a symbol of wickedness is presented as innocent of the charges against her. Medea, and by analogy Christa Wolf herself, is presented as a woman whose reputation consists almost entirely of the sins of her accusers.

Leibhaftig (In the Flesh, 2003) reports on a life-threatening illness of the narrator shortly before the end of the GDR. Ein Tag im Jahr: 1960-2000 (One Day a Year, 2003) was a book of essays about her life in the GDR.

Gradually a degree of sanity was restored to the debate over Christa Wolf's place in the German literary pantheon. When, in 2002, she was awarded the first Deutscher Bücherpreis (German Book Prize) for her lifetime achievement, the jury praised her for "courageously confronting the great debates of the GDR and reunified Germany".

Christa Wolf never fully reconciled herself to life in the new Germany, and her later writings were pervaded by a sense of loss. As Western products began to appear in the old East German supermarket shelves, she preferred to buy "a bunch of wooden clothespins, guaranteed to be old East German products, and a similarly dusty trash can made of hard rubber, which stands hidden behind all of the new, sensational trash can models".

Christa and Gerhard Wolf had two daughters.

Christa Wolf, born March 18 1929, died December 1 2011