Martello towers were built, at great cost, along the coasts of Kent, Sussex, Essex and Suffolk at the time of the Napoleonic wars. Originally, there were 103 of these 30ft-high towers, with walls 13ft thick and roof-mounted cannons capable of shooting lead balls a mile out to sea.

Duncan Jackson's Martello tower, rising from behind the seawall at Bawdsey in Suffolk, is a daunting structure, yet it has been reworked to provide a warm and unexpected welcome: warm because the thick walls keep the winter at bay; and unexpected because, inside, industrial designer Jackson has shaped one of the most original and soul-stirring modern homes in Britain – from a neglected fort never designed for comfort.

Until it became redundant in the 1870s, there had been troops at Tower Y, as well as coastguards after Napoleon's defeat. The spartan living quarters, however, had been crammed around the entrance floor, above an arsenal of gunpowder and cannonballs, and below the wind-scythed roof deck. Today, from the battlements, or rather the roof terrace, three other towers can be seen, dotted along the shingle coast.

Jackson first came across the tower in June 2000, when it was rotting away at the edge of a farm. And so began a 10-year affair with 750,000 Suffolk bricks. "I wasn't wholly naive," says Jackson, whose American wife and young daughter are now settling in. "I spent a year in negotiation with the farmer. He put in mains water and electricity, but I did have to face up to the fact that the tower was a Scheduled Monument, that it was on the Buildings at Risk register, and that it's part of an Area of Outstanding Natural Beauty that's also a Site of Special Scientific Interest. Given all this, perhaps I should have cut my losses and walked away."

Instead, Jackson and his architect Stuart Piercy got stuck in. The two had worked together at Nicholas Grimshaw and Partners – architects of the Eden Project – so had experience of taxing commissions requiring the highest standards of detailed design. Making Tower Y a home, though, was never going to be easy. "When we first walked round," says Piercy, "the cellar was five-foot deep in water, while the roof was covered in soil blown across the fields over the years. But the underlying structure was as strong as a battleship."

Jackson adds: "We made friends with the conservation and planning people. We needed them on our side. There are people who say the towers shouldn't become homes because this takes away from their historic role. But if they aren't going to be lived in, what's to happen to them? Those that hadn't been blasted away during target practice by the military have often been left to rot, and then demolished."

Spectacular view … the top floor, showcasing some of the tower’s 750,000 bricks. Photograph: Edmund Sumner

It was the undulating new plywood roof, swooping over three-quarters of the battlements, that did most to turn Tower Y into a modern home. This elegant parasol not only provides a dramatic ceiling for the top floor living space, kitchen and dining area, it also allows mesmerising 360-degree views of the Suffolk coast: on one side tractors plough fields; on the other, vast ships plough the last leg of journeys from, say, China to Felixstowe.

Here is a special place to cook, entertain, or just while away the day. Stroll out onto the terrace and you feel as if you've walked from the bridge of a modern liner out on to its deck, where you stand bathed in light and sucking in sea air. Only the two spiral staircases beckoning from the sides suggest that, below decks, there's another dimension: a cavernous, circular brick chamber, with oak floors set around a vast central brick column. Here, lit by windows set into those deep walls, is another ravishing living space.

This circular living room boasts a large fireplace and sitting area, as well as a cloakroom, a storeroom and a lobby leading to the front door – set some 20ft up from the ground and reached by a straight new steel stairway. Directly below that thrilling space, there are cosy bedrooms, the main ones ingeniously lit by lightwells cut through the brick at steep angles. These bring daylight into what would otherwise be dark storerooms better suited to housing cannonballs. A room for children, meanwhile, is being fitted with a camera obscura that will reflect the seascape on to its walls.

The main living area and central brick column. Photograph: Edmund Sumner

These rooms, complete with grotto-like bathrooms, work beautifully down in the basement. "It was the only place for them really," says Piercy. "Otherwise, we'd have been forced to cram them into the big living chamber upstairs. That would have lost us the great sense of space you get up there."

The overall effect is magical: brick fort on the outside, palatial home within. The main space, approached from the entrance lobby, is breathtaking, with the climb up the spiral stairs enjoyably spooky, and the top floor a revelation: all light, space and comfort, with little hint of ostentation. But then you don't need decoration when you have the sea and all its moods just beyond the parapet, with ships hoving in and out of view, and sunlight playing over that lichen-encrusted brickwork throughout the day.

All the lighting, heating and plumbing gubbins have been carefully concealed, but some doors do lack handles; this is simply because, after so many years, Jackson has still to find the right ones. Best of all is the fact that the tower remains very much itself, and very much as it always was, seen either from the coastal path – or from a ship on the waves, through a captain's spyglass.