Packed with belonging

ARMS OPEN WIDE, A HYPERACTIVE grin on his puckish features, Peter Carey welcomes me to his new home in New York: a state-of-the-art Broadway loft minimally furnished with a fabulous collection of modern art – and the tidiest desk I've ever seen.

He's immensely proud of the huge apartment he's designed with his partner, the publisher Frances Coady, following a painfully public and acrimonious divorce from his wife, Alison Summers, the mother of his 17 and 21-year-old sons. Today, he says, that lively smile splitting his face from ear to ear: "Life is good. I've gone from misery to great happiness."

The 64-year-old Australian-born writer is contented professionally, too. A gifted prose stylist, his new novel, His Illegal Self, is as fast, furious and fantastical as the rest of his oeuvre, for which he's scooped the Booker prize twice, as well as a raft of other major literary awards, including a pair of Commonwealth Writers' Prizes.

Carey comes across as laid-back, but with boundless energy to spare, an impression borne out by his work. Indeed, His Illegal Self has all the bravado and vivacity of the Booker-winning Oscar and Lucinda (1988) and The True History of the Ned Kelly Gang (2000), as well as the more recent, Booker-nominated My Life as a Fake (2003).

His Illegal Self begins in 1972 and is set partly in New York, where Carey has lived for almost 20 years. The book is told mainly from the perspective of Che, a knowing but utterly believable eight-year-old who lives with his grandmother in isolated privilege on the city's Upper East Side. His parents are student radicals on the run from the FBI. Che has never seen them, apart from in the tight bundle of newspaper cuttings he carries around in his back pocket.

When a young woman called Dial – short for "dialectic" – turns up, Che believes he recognises her, although he must not call her "Mum". After a series of muddled adventures, the pair escape from America to Australia and a putrid hippie commune in the Queensland rainforest, a place of torrid, corrupt heat and enchantment. Occasionally, the story is told from Dial's viewpoint and the climax is surprising and shocking.

Both brutal and tender, the book is about love and an orphan's loss of innocence. Carey jokes that there's an endless string of orphan characters in his books, which he puts down to his parents sending him to boarding school when he was 11. However, he believes His Illegal Self echoes the trauma of his country – "Australia's a country of orphans."

One of the many starting points for the novel was Carey's memories of his own time in a south-east Queensland commune 30 years ago, although it was a lot hippier and much less political than the one in his book.

"It was an entirely pleasurable experience, really wonderful," he remembers.

"I'm always astonished how clearly I can see lost places – I had the most intense visual and sensual recall of both the time and the place while I was writing His Illegal Self. I was so happy to be there, writing about a little jewelled thrush in the rainforest, then going to see my Pilates instructor or to cocktail parties.

"But I feel blessed to have lived there and blessed to have lived with those lovely, smart people although, like so many things in my life, I didn't mean to do it.

"I'd been living in Sydney with a woman who inherited a little money, and she saw a photograph of this picturesque hut in a health-food shop window. She wanted to go there and I went with her. It was very tropical, flies crawling over every surface." Nevertheless, "we were living in paradise".

Most of the community lived on unemployment benefit. "The police were nasty," he says. "They'd come round and threaten to plant dope on me if I didn't give my name and address." Once a month, Carey would fly back to Sydney and work in an advertising agency, where he was a director. He also wrote mornings and nights, completing a collection of short stories and his novel Bliss (1981) in the commune, "without running water or a telephone".

Another of the starting points for His Illegal Self was his desire to produce very particular sentences, he confides, after I remark on his ability to disrupt and tear sentences apart in the most audacious way. "What I tried to do at first was to tell the story in the voice of Che as an American man inhabiting himself as a runaway child in Australia in the early 1970s, being put in situations and in a landscape that he doesn't understand.

"In the end, of course, I also used Dial's point of view, but the fact that it was my original intention to use this 40-year-old recalling himself as an eight-year-old put pressures on sentences that produced an interesting verbal texture. Now, I guess the voice of the novel is the child of that voice.

"I think a lot about sentences now, in a way that I didn't when I was younger – I have to confess that I came to my passion for the sentence rather late. In my early work, for instance, I'd no care for such matters. One of the huge pleasures, or rather the sense of urgency I have, when I'm writing is to try and put myself in a place where the words are new.

"I teach (he's chair of New York's Hunter College writing programme] and I'm always telling students how good it is if you can just get rid of one or two words in a sentence – you have to have that sheer desire for absolute accuracy, for nailing things together in a new way," he says.

"What really fascinates me, though, is the power of the imagination. I believe that writers should write about what they don't know, not about what they do know. Some of my students become trapped in their own lives, churning over the crimes of parents and siblings, which stops them discovering the incredible joys of invention.

"Perhaps it was writing The True History of the Ned Kelly Gang that really freed me up – maybe it was being brave enough to abandon all punctuation in that book that did it. Getting rid of punctuation means you have to get rid of all sorts of sloppiness in your writing, you have to be really, really exact. And it allowed me to be playful with language, which is what I'd admired in serious literature when I first started to read it when I was about 18."

He pauses and continues, with an impish smile: "Writing's a mysterious process. It doesn't do to analyse it too much. This will sound romantic coming from me, but I do feel it's often like I've been through a fit of madness. When I'm a little anxious or insecure, I'll take down one of my earlier books to try and cheer myself up. It never works. I either think, 'God, this is crap!' or 'This is good, I couldn't do that again!' Sometimes, though, it's like someone else wrote a particular book."

Every time he finishes a novel, Carey, who is still at the height of his powers, is convinced it will be his last – his next one, set in 18th- century France, New York in the 1800s and Devon in the 1930s, is already in gestation on the iBook on that neat desk. "I usually don't have that many ideas, mainly because when I've written a book I often feel as if I've totally emptied myself."

Finding a narrative voice is never simple. "The novelist Patrick McGrath is my friend. Weirdly, he's the only writer I know that I ever talk to about what I'm doing. He tells me what he's doing. He told me he had this image of an airstrip in his head. It was early morning and a woman was standing on the edge of it."

When Carey asked what was going to happen, McGrath replied: "I don't know." Carey recalls thinking: "Oh, you wonderful person. Isn't that great." So when he started His Illegal Self he began playing with an image of a woman and a little boy walking along a road in Queensland, with a storm coming. "I'd a rough idea what was going to happen, but I had all sorts of trouble with this before I realised I had to imagine the past, too. When I asked Patrick, 'Whatever happened to that woman on the airstrip?' he said, 'Oh, I dropped that ages ago, it didn't work at all'. So thanks for that, Patrick."

The other first reader in Carey's literary life is Coady, whom he says is entirely responsible for his new-found happiness. He and Summers divorced in 2003; then she accused him of "misuse of literature", claiming a character – "an alimony whore" – in his 2006 novel Theft: A Love Story was a thinly disguised portrait of her. Carey responded that if he'd wanted to write a memoir, he would have done so.

"I had to keep saying to people, 'Have you actually read the bloody book?' It was ridiculous, but now my life's changed completely. I was very miserable because I didn't ever expect to get divorced; then Frances came along. I'm blessed. And I'm full of creativity – it's like my head's going to burst open. It's wonderful. Every day's a miracle," he says, unable to keep that smile off his face.

&#149 His Illegal Self is published by Faber and Faber, priced 12.99.

Peter Carey on ...

Creating characters: "I do not speak to them outside working hours, although the pleasures of creating proper characters is enormous, especially since novelists are prone to magical thinking anyway. You write something; then you meet someone who's exactly like the person you invented. My novel Illywhacker has some of that argument about it – the storyteller, Badgery, tells lies which later become truths."

Writing novels: "It's a privileged way to spend your mornings. When you have made some nice sentences, how thrilling is that? And then you get to go to lunch – I'm enthusiastic about lunch."

The unexamined life: "For a writer it's the only one worth living. As a human I'm better off knowing why I do things, but as a writer I don't want to know. Everything that happens to me goes down like sediment to the bottom of the river. I do draw on that swampy stuff, but it's better not to know where it came from; also it's a good excuse not to improve my character."