The nine stories in Margaret Atwood's new collection should, she explains in an afterword, properly be considered "tales": removed "from the realm of mundane works and days", evoking "the world of the folk tale, the wonder tale, and the long-ago teller of tales". Here are vampires, ghostly presences, disembodied hands; revenge, possession, and something very nasty vacuum-packed in an abandoned storage unit. There are also tales about tales – pulp horror, epic fantasy, love poetry – with nearly all the characters looking back from old age on a distant past that has become its own mythological landscape.

That distant past, in the three linked stories that open the collection, is boho Toronto in the early 60s, when hungry young poets wrote gems such as "My Lady's Ass is Nothing Like the Moon" and women queued up to minister to their genius and be written about. Constance Starr is an elderly muse-turned-author, whose swords-and-sorcery fantasy world Alphinland was mocked by the poets she outsold, but who has gained critical respectability now that academics study "the function of symbolism versus neo-representationalism in the process of world-building". Her first love, back when she was "young enough to find poverty glamorous", was womanising, self-aggrandising Gavin, whom we revisit as a sulky elder statesman of literature, cosseted by a younger third wife who berates him for his unreconstructed ways: "You can't talk to women like that anymore!" Gavin may be furiously sentimental about the past – watching a grainy video of a 60s poetry reading, he wants to weep – but nostalgia, Atwood suggests, is just another form of male privilege.

Atwood pokes gentle fun at Constance's Alphinland: the silly names, the cod-medieval lack of cutlery, the fans dressing up as Milzreth of the Red Hand and arguing about subspecies of dragons. But in a collection full of would-be storytellers, Constance is the real thing; Alphinland is real to her, whereas Gavin's poems were only ever literary effects, and this gives it a charge that's all the more powerful for being ambiguous. There's an extraordinary moment at a funeral where Constance meets the woman Gavin betrayed her with, a hurt both have been carrying for 50 years and which has been threaded into the very fabric of Alphinland. They embrace, and the other woman's over-the-top glitter makeup, applied with dimming eyes and a shaky hand, leaves golden scales on Constance's "parchment skin": they become fabulous beasts as well as mourning elderly women.

The same blurring of the bounds of reality is found in "The Freeze-Dried Groom", where a con artist who constantly tells himself stories of his own demise is drawn into danger with a kind of reckless delight. "The Dead Hand Loves You", meanwhile, combines the horror-story convention of the contract signed in blood with a gloriously silly tale of a disembodied hand menacing the woman who jilted its previous owner. The inspiration of "some tawdry, pulp-hearted, flea-bitten muse" seized upon by a 60s student struggling to pay his rent, it's nevertheless spawned decades of Jungian and Freudian analysis, two films and a whole critical industry. As in the other stories, realism and ridiculousness, play and deadly seriousness, are held in fine balance throughout.

Other books hover behind the pages – Martial's love poetry in "Dark Lady"; Kafka's "The Metamorphosis" in "Lusus Naturae", where a girl's monstrous transformation needs practical handling by the family who must provide her with bread, potatoes and cups of blood; the recent slew of vampire romances. You used to know where you stood with vampires, one character remarks in a rueful riff on yet another discombobulating effect of the passage of time. "Now there are virtuous vampires and disreputable vampires, and sexy vampires and glittery vampires, and none of the old rules about them are true any more". Atwood revisits an earlier work of her own in "I Dream of Xenia With the Bright Red Teeth", where the characters from The Robber Bride, now lapsed into comfortable old age, wonder if the woman who betrayed them all so long ago has returned to haunt them.

This story, and "Lusus Naturae", were written by invitation for anthologies; they are not the only pieces that feel like curiosities, or very wintry jeux d'esprit (several take place during a polar vortex). Strangely, the title story, which began life as a tale to entertain fellow passengers on an Arctic cruise, is the least arch piece in the collection. Its purpose was to suggest how to get away with murder on board ship; it's a revenge story, but also a hard-hitting account of sexual violence in a small town in the 60s, "so long ago it might be centuries", but thrown into sharp focus against the Arctic backdrop.

This long view throughout the collection is entirely unsparing, both of the vanished past and the vanishing present, but Atwood's prose is so sharp and sly that the effect is bracing rather than bleak. Jack, the author of "international horror classic" The Dead Hand Loves You, reluctantly agrees with his old housemate, now dying of cancer, that they did indeed have fun back in that shabby student house in 60s Toronto, living on rice and beans, squabbling and sleeping with each other. "From this distance it does resemble fun. Fun is not knowing how it will end."

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