  We present a variational approach based on the string picture to analyze the
internal structure and dispersion of spin polarons with different symmetries in
an antiferromagnet. We then use this to discuss the properties of underdoped
cuprate superconductor within the `doped insulator' picture. The theory
explains the remnant Fermi surface for the undoped compunds, as well as hole
pockets, Fermi arcs, high energy pseudogap and the the mid-infrared band in
doped materials. Destructive interference between the phases of a photohole
near $\Gamma$ and the internal phases of the Zhang Rice singlet combined with
our theory moreover explains the `waterfall' phenomenon.
