Australian psychedelic artist Martin Sharp, a founder of the controversial Oz magazine who designed posters and album covers for Jimi Hendrix, Donovan andBob Dylan, has died aged 71.

Sharp, who also designed memorable album covers for Cream's Disraeli Gears and Wheels Of Fire albums, died on Sunday December 1 following a prolonged struggle against emphysema.

He was born in Sydney in 1942 and after leaving the private Sydney boys' school Cranbrook, Sharp studied at the National Art School in East Sydney. He and fellow artist Garry Shead helped start an unofficial student newspaper at the school called The Arty Wild Oat.

He came to prominence in the Sixties after founding the famed Oz magazine with Richard Neville and Richard Walsh. The trio were twice charged with printing an obscene publication and a 1964 cover, showing Neville and two friends seemingly urinating on a sculpture, provoked fierce controversy.

Once his convictions were overturned on appeal in 1966, Sharp moved to London where he and Neville established London Oz along similar lines. In 1969, Sharp withdrew from the magazine and his place was taken by Felix Dennis.

Sharp is best known for the psychedelic posters he designed for musicians. Sharp said the psychedelic experience changed his view of the world, adding: "There was a feeling of optimism, the possibility of the world working. That was definitely part of the experience."

Sharp would listen to music when he painted and was a Dylan fan. "He's singing about things which people didn't used to sing about, you know, moral issues and songs about the racial problems," Sharp said, "and The Times They Are a-Changin of course is a very dramatic song for those days, and still very valid. An amazing figure I think."

He was a friend of Eric Clapton (the pair lived in the same house in Chelsea for a time) and recalled: "Eric asked me to design the cover for Disraeli Gears. I loved record cover art and was very happy to do it. I was using fluorescent paints at the time. It was the height of psychedelia. Some of the ingredients in the cover are made up from Victorian decorative engravings. It was done in black and white first and then painted with fluorescent colours. I tried to capture the warm joyful liveliness of Cream's songs."

The artist was also outspoken in the causes of civil liberties and Aboriginal rights, saying once: "Art has been my way of having a say".

Sharp lived in Sydney for the final four decades of his life and among his work was one of the versions of the iconic clown's face entrance to Sydney's Luna Park. A fatal fire in the park's ghost train in 1979, in which six children died, changed his outlook on religion and made him a firm believer in God.

"We've lost a major figure and a great character," said Wayne Tunnicliffe, head of Australian art at the Art Gallery of New South Wales.