It's hard to keep Henry James out of the conversation when talking to Colm Tóibín, winner of the International Impac Dublin Literary Award for his novel about the great writer, discovers Eileen Battersby

Poised somewhere between gravitas and delight, Impac award winner Colm Tóibín sits at a small corner table in a city hotel lounge not far from Ireland's political epicentre. It does not seem all that long ago since he was one of the emerging Young Turks of late 1970s and, particularly, 1980s Dublin journalism, fired by ambition and a belief in the power of quality reportage. He and his peers had something to say about Ireland and they said it in a quasi-literary style honed by supportive competitiveness.

Time may have passed quickly, but Tóibín moved even faster, becoming a respected, classical man of letters and an international novelist who continues to offer opinion and commentary, responding to literature and history as well as to the moment. Within hours of his Impac victory, he was writing an article on the enduring ambivalence of Charles Haughey.

"I had an hour to spare, and I can still do it," he says. And do it he did, arriving closer to the man behind the mask than many of the more fulsome eulogies spanning the news pages.

Long before Tóibín's subtle, sophisticated fifth novel, The Master (fittingly written in longhand), took the world's richest prize for fiction, international writers were taking notice of him. His name had begun creeping into interviews. His first novel, The South (1990), with its echoes of Elizabeth Bowen and atmospheric edgy mood of displacement, was quickly noted, as was The Heather Blazing (1992). While he was still a high-profile journalist at home, he was a novelist elsewhere.

Most importantly, he has never rejected journalism. By keeping it out of his fiction, he could write polemic and opinion, "but keep the poison out of the fiction".

He is a mercurial character, able to balance instinct with practicality. He smiles his scary smile in a face still dominated by youthful eyes, and just when it seems he is about to release a wicked tale of local intrigue, he sidesteps and conveys genuine excitement in his discovery of a literary cross-reference, a coincidence or an historical fact, such as that Henry James knew Turgenev, Daudet and Singer Sargent.

Wide-eyed and enthusiastic, he is informed, lively company, engaged if remote. Tóibín possesses the natural detachment and curiosity vital to the true writer. His magpie's mind races, yet possibly due to years on the literary circuit, writing residencies and working with students, his observations arrive fully formed. Capable of recognising an idea and pursuing the narrative contained in a gesture, he is alert, deliberate, astonishingly hard-working and professional. He has reached a stage at which everything he says - and writes - carries weight.

The waiter comes over, bearing sufficient physical resemblance to author DBC Pierre to suggest, for a moment, that this might prove a different kind of interview. On hearing my suspicions, Tóibín bursts out laughing, takes a second look and agrees that the man does look alarmingly like the former Booker Prize winner. "Did you read that second book?" he asks. The waiter, oblivious to the speculation about his identity, walks away.

A third presence does remain, though: it is that of Henry James, American literary master, consummate European and, as Tóibín so brilliantly evokes in his graceful book, perennial outsider. Tóibín first read Portrait of a Lady when he was 19 ("I didn't read him when I was at school, I was busy reading Sartre and Camus and Kafka").

Encountering James was a defining introduction and he was hooked. In little more than a year, he had read all of James's work and was seduced. Yet The Master evolved by chance.

"I was asked to do a piece for this RTÉ radio series, Giant at My Shoulder - you know it? I said I would do Henry James and I thought: 'I have a character.' "

He didn't write a text. Instead, he arrived at the station with quotes from James's novels and recalls saying to the producer: "Just ask me questions and I'll talk."

It is the same with this interview, Tóibín, shaped by two contrasting presences, John McGahern and John Banville, has a store of interesting things to say. The intellectual life of 19th- century Europe shimmers and glows on a June evening in Dublin.

What drew him to James? "It was his mixture of pure determination and ambition and also the fact there's a great ambiguity about almost everything. There is in him huge opposites."

Obviously Tóibín, who also seems quite driven, has a tremendous understanding of his subject. This understanding shapes The Master and it also goes beyond the book itself - there is a real empathy. Tóibín does not think he is Henry James, but he knows how he must have felt. There are obvious points of connection. Within minutes he has articulated the enigma of James.

"He was not much loved, he was never adored as a man like Dickens was," he says. "There is not much sense of James as a character as there is of Joyce."

It is true. James never conformed to the idea of writer as public man or even as popular public figure. Nor did he impose himself on his fiction. The cartographer of consciousness was discreet in a way that, say, Tolstoy, never was.

Tóibín explains this by drawing on a remark James once made: "He was conscious of having failed in his life to, as he said himself, 'take measure of the great flat-footed public'."

Although he had a busy social life and was not reclusive, James never did readings. He was wary and although he had intense friendships with women and also a succession of young men, complete engagement eluded him. James was not so much private as detached.

"There was also his being a classic second son with a dominant elder brother," says Tóibín. "James loved his family but he also longed to get away from them."

The Master is neither a biographical novel nor an historical novel. Although Tóibín makes effective use of the source material, often in only a passing aside (as he writes of Alice, Henry's sister, when she was 16 and feeling pompous, "She had sounded like Emerson's aunt, someone steeped in the philosophy of life and death, someone who prided herself on the independence of her thought"), Tóibín was careful not to allow detail to take over, concentrating instead on specific episodes from James's life.

The book has 11 chapters and each reads as a set piece framed by memory. It begins in 1895, when James was 52 and about to endure the professional agony of the spectacular failure of his play, Guy Domville. This was a crisis made all the more painful by the brief success of Oscar Wilde and it occurred shortly before The Wings of the Dove, The Ambassadors and The Golden Bowl.

The Master can be described as a period narrative and Tóibín appears to approve of the distinction. Historical fiction, by its nature, is often submerged in information and detail, but Tóibín was intent on evoking the psychological while excluding Freud (who emerged after James).

Born into a Victorian world, James survived into the Edwardian period, but although he died in 1916, he was to remain a Victorian. The process of becoming an outsider and, with it, a self-created European, began in childhood.

"They spent all their time on the move," says Tóibín. "It was incredible: here were these Americans travelling in France and Italy - they knew the art, the music (James had no interest in music), the books, the languages. Henry James spoke very good French. Their father was concerned about their sensuous education. There was not a huge priority placed on that in Enniscorthy." He pauses and the conversation continues.

Henry James senior was either unusually enlightened or merely culturally paranoid, but he was certainly committed to informing his children. His restlessness took over.

"These were the years of their father's great restlessness, when they crossed the Atlantic in search of something that none of them understood, a distraction from his father's passionate and eager bewilderment," says Tóibín. "They were dragged from city to city, hotel to apartment, tutor to school. They spoke French fluently and they knew themselves to be strange.

"It made all five of them stand apart from their generation; they knew both more and less than others. More about opulence and history and European cities, more about solitude and uncertainty, more about standing alone and being independent. Less about America, and the web of connections and affections being woven by their contemporaries . . . Henry had no real memory of Thackeray's visit to the family table in Paris, although he remembered other sightings of him."

Formality became James's medium, "he spoke in amazing long sentences, very ponderous, it really irritated HG Wells". Tóibín speaks of the importance of secrecy in James's fiction: "There is always a secret, usually sexual, in all the big novels as with Gilbert Osmond and Madam Merle in Portrait of a Lady, and so on."

James's sexuality was also mysterious and Tóibín recalls being annoyed when he discovered James classified as a gay writer in a library in the US. The anger - "everyone always has to be classified" - helped, as it drew him closer to James.

The Master was a book that had to be written. Another inspiration was the opening pages of JM Coetzee's The Master of Petersburg. "I thought, what is going on here?" says Tóibín.

Vital to the project were James's notebooks, in which there are two references to Lady Gregory. True to his flair for pursuing information, Toibin not only researched these references but wrote a monograph on Lady Gregory.

On deciding he wanted to write a book about Henry James, "I had to get some money so I could write it". (James was, admittedly, a surprising subject for him, but then, all his books are different - he says he 'kind of drifts into them" even though he is organised and in control of his creative instincts.) He went to his publisher, secured the financial support and was ready.

"I wrote the first chapter in 2000 and then I spent the next 18 months on a fellowship at New York Public Library," he says. There he worked in a circle of interesting people all embarking on projects. He completed Lady Gregory's Toothbrush and then returned to the James novel in August 2001.

"And then 9/11 happened," he says. "A lot of writers found they couldn't write after that. But I was determined not to let it affect me. I didn't want to let it stop a word."

The more Tóibín discusses Henry James, the stronger becomes the presence of the third person at the table. All the while he stresses the need to be careful and not to let details take over. This is particularly true when dealing with James: after all, here is a writer of whom the standard biography - Leon Edel's magisterial, somewhat Proustian, study written between 1953 and 1972 - spans five volumes, "and there are two books of letters".

Edel was vital to Tóibín: "I had dipped into it before, but then I went and read it all. Interestingly, one of the most fascinating aspects of the book, that of James's friendship with Constance Fenimore Woolson, which ended with her suicide, was inspired by Lyndall Gordon's A Private Life of Henry James: Two Women and His Art."

Woolson, ill and weary of waiting for James, who had always appeared on the brink of beginning a relationship with her, jumped from her window in Venice and was later buried in the Protestant Cemetery in Rome. Novelist Edith Wharton was another friend.

"But that was a happy friendship" says Tóibín. "I could do nothing with it." There was also the fact that Woolson drifts through James's fiction. "She was his American, she knew what a rattlesnake was."

During the writing, Tóibín lived in his imagination, but then began to balance it with the physical. A sense of place tends to inform his work.

"Those rooms in The South, I lived in each of them," he says. "I suppose that book came from my unhappiness when I returned to Ireland from Spain. I had lived there for three years and then I felt I'd lost it and wanted to keep it."

He grew up in Enniscorthy, one of five children born to a schoolteacher. It was an old-style Fianna Fáil household and Tóibín remarks how upset his father and uncle would be if they knew what Fianna Fáil had developed into. For the last years of secondary school, Tóibín was a border at St Peter's in Wexford town, where his English teacher, Father Larkin, had some 11 years earlier, also taught John Banville.

"I know the town of Enniscorthy so well," Tóibín says. "It haunts me. We could see Vinegar Hill from the house."

This force of memory gave him The Heather Blazing, in which "I left out the politics and concentrated on the personal".

It was the same with The Story of the Night. He had gone to write an essay, The Time of the Generals, about Galtieri and the Falklands crisis, and this led him to the novel.

The Blackwater Lightship, which was shortlisted for the 1999 Booker Prize, was an important book, demonstrating a stylistic advancement in terms of characterisation and dialogue.

"It was a difficult book to write, all those people in that one house," he sighs.

With The Master he entered a new stylistic phase. Ironically, he was to benefit from the ordeal of being on the 1999 Booker shortlist.

"Nothing prepares you for the horror," he says "All those cameras and lights in your face, and then suddenly someone wins and the lights are put out and the very thing that empowered you in the first place, the book that took you there, doesn't matter any more."

Coetzee won that Booker. Five years on, Tóibín was again shortlisted, for The Master. He should have won, but didn't. This time there was no horror and he liked the winner, The Line of Beauty.

It is fitting that such a supporter of libraries should have won Impac, a prize organised by international city libraries. Nominated by 17 libraries, including Dublin, Limerick and Cork, Tóibín was a strong contender. His challenge came from Maps for Lost Lovers, by Nadeem Aslam, which he reviewed on publication, describing it as "a superb achievement, tender, nuanced and wonderfully imagined." Did he expect to win?

"Judges like issue novels," he says. "I was in the States and I have to say I wasn't worried, I just felt I wasn't going to win but that was all right."

Obviously The Master is his major book and he is pleased that it has done so well in the US, "far better than here or Britain".

"Feeling is so important," Tóibin says. "It's like Hemingway said: you put the emotion in between the words but try not let the reader see how you did it."

Tóibín has already amassed a distinguished body of work, but he is compulsive ("I work hard; I want to write"). In a letter to Daudet, James described himself as a "constant producer." It is a phrase that Toibin likes.

"I'm like that, I'm a constant producer,"he says.