Few melodies have become quite as insinuatingly popular as Percy Grainger's arrangement of the traditional air In an English Country Garden. The piece has been performed by everyone from Leopold Stokowski to the Muppets, though Grainger quickly grew to loathe the tune: "A typical English country garden is more likely to be a vegetable plot than used to grow flowers," he complained, "so you can think of turnips as I play it."

Fifty years after his death, it is hard to conceive how great a celebrity the Australian composer, pianist and folk-song collector once was. Widely acclaimed as one of the most gifted concert pianists of his generation, he earned the equivalent of £60,000 per week, befriended Grieg, Gershwin and Duke Ellington and got married on the stage of the Hollywood Bowl before an audience of 20,000. Yet Grainger, born in Melbourne in 1882, never quite lost the taint of an outsider – a loose cannon whose personal eccentricities threatened to overshadow his achievement.

Grainger was, by any standard, unaccountably odd. He favoured garish, towelling outfits of his own design, was known to mount concert platforms at a running leap, and pushed his favourite piano stool round in a wheelbarrow. In 1945 he devised his own composer-rating system and ranked himself ninth, below Delius but above Mozart and Tchaikovsky. He placed Bach the top of the list because "if he were living today, I feel Bach would include ragtime, Schonbergism, musical comedy, Strauss and all the grades in between."

Practically all of Grainger's compositions are miniatures, between two and eight minutes in length, and often feature unconventional forces such as harmoniums, banjos, theremins and ukuleles. His disdain for classical form extended to a rejection of Italianate terms for tempo and dynamic markings – Grainger's scores indicate "louden" rather than "crescendo", or instruct the player to interpret a passage "with pioneering keeping on-ness". His rejection of the symphony, sonata and concerto was deliberate, but contributed to the impression that he was merely a dilettante or a purveyor of light music.

The Northumbrian pipe player Kathryn Tickell challenges this. "I think anyone who considers Grainger's music lightweight simply lacks the imagination to perform it the way it was conceived," she says. "The trouble is, he became his own worst enemy where posterity is concerned. There are very few orchestras able to bring in a bass concertina or a detuned guitar for a piece that lasts maybe a minute-and-a-half."

Tickell is experienced in dealing with the exigencies of Grainger's music. In the summer, she and her band performed a suite of Grainger's songs as part of the BBC Folk Prom. And this weekend she is curating a weekend-long Grainger mini-festival at the Sage, Gateshead, featuring the Northern Sinfonia, folk singer Bella Hardy and a posthumous appearance from Grainger himself, in the form of his piano roll version of the Grieg piano concerto.

"I'm usually quite suspicious about classical composers who impinge on the folk world," Tickell says. "But Grainger is different. He collected all the difficult tunes that no one else wanted to set. Shepherd's Hey, for instance, is a bit of a dirge, but he transformed into something so life-affirming it makes you want to shout. But he never sought to prettify the material or make it polite. His Lincolnshire Posy suite was arranged for a military wind band, yet it still sounds like folk music. He recognised the songs for what they were – tales of poverty, vitality and survival."

Grainger was the first to use a phonograph to record folk songs, and held untutored musicians in high esteem. "These folk-singers were the kings and queens of song!" he declared. "No concert singer I ever heard, dull dogs that they are, approached these rural warblers in variety of tone quality, range of dynamics, rhythmic resourcefulness and individuality of style." In 1912, he travelled to the Pacific islands to notate native songs whose random combination of musical elements anticipated John Cage's experiments in "chance music" by some 40 years.

Towards the end of his career, Grainger ceased conventional composition altogether in an attempt to bypass the "absurd goose-stepping" of standard notation. Grainger believed western music to be arrested at a state similar to the two-dimensional artifice of Egyptian sculpture, and spent his latter years attempting to construct a machine capable of generating scaleless, pulseless, synthetic sound which he termed "Free Music". The various prototypes were among the earliest attempts to build a synthesiser, and though Grainger's ambitions outstripped the available technology, he would no doubt be delighted to find that YouTube now hosts examples of his Free Music adapted for iPhone.

Though his music is rarely solemn, there is a darker side to Grainger's personality that is difficult to ignore. His views on the superiority of blue-eyed Nordic races are not easy to accept, and he made little secret of a violently aberrant sexuality: in the 1930s, he endowed a museum in his birthplace of Melbourne, and entrusted it with a large collection of whips, pornography and blood-stained shirts: "Music is the art of agony," he noted. "It derives, after all, from screaming."

Grainger established the museum – which is still in operation – as part of his lifelong aim to become recognised as Australia's first significant composer, though he left the continent as a teenager and spent the majority of his life in London and the small town of White Plains outside New York. He died of cancer in 1961, convinced his efforts had been in vain: "All my compositional life I have been a leader without followers … Where musical progress and compositional experiment are discussed, my name is never mentioned. Can a more complete aesthetic failure be imagined?"

It is hard to identify the Australian traits within a catalogue of music largely dedicated to enshrining English folk song: yet perhaps Grainger's most antipodean characteristic was the manner in which his musical canvas became a vast, virgin territory open to all outside influences. He was perhaps the first composer genuinely to believe that a jazz band was no less significant than a symphony orchestra, that a squeeze box could be as expressive as a grand piano, and to prefer playing in cinemas to concert halls. Above all, he believed that music was a universal art: "As a democratic Australian, I long to see everyone somewhat of a musician, not a world divided between undeveloped amateurs and overdeveloped musical prigs."

Kathryn Tickell hopes the Sage's Grainger weekend will honour this spirit. In addition to formal concerts, there will be a garden tour for under-sevens, a cutlery percussion workshop, and a pair of grand pianos set out on the concourse on which players of all levels are invited to participate in a marathon performance of the complete piano arrangements. "My working title was the completely-mad-come-and-have-a-go-Percy Grainger weekend," Tickell says. "My only regret is that we couldn't get a theremin ensemble to play some of the experimental music. But I find it hard to think of any other composer who appeals to such a broad range of people, from classical players to folk musicians to toddlers. There are plenty of composers who make you frown. There has to be room for one who puts a smile on everyone's face."