For fans of children’s literature, it is an unmissable sight: Philip Pullman’s own alethiometer, a detailed realisation of the magical symbol reader described in Northern Lights, gleaming with secrets – or possibly even particles of “Dust” – on display at the new Story Museum in Oxford.

An unforgettable peek at the mysterious compass-like device is just one of the unique literary experiences on offer when the children’s museum reopens next month, after a £6m redevelopment.

The opening, on 4 April, will mark the climax of a 20-year project to celebrate stories in all their forms in Oxford. Although the city has a rich literary heritage as the home of famous children’s authors such as Pullman, Lewis Carroll, CS Lewis, JRR Tolkien, Diana Wynne Jones and Katherine Rundell, Oxford has high levels of child illiteracy and was the lowest-ranked district in the country for reading and writing in 2010.

Philip Pullman’s alethiometer with a model of the author. Photograph: Courtesy of Philip Pullman and The Story Museum

“All the various projects we’ve done over the years have shown the impact we can have,” said the museum’s founder, Kim Pickin. “We can help children to get more interested in stories and motivated to read. That can have a really big effect on children’s vocabulary, and this also feeds through to their writing and reading.”

Permanent exhibitions include a “whispering wood”, where children can listen to trees telling fables and fairytales from all over the world, and an “enchanted library”, where visitors can step inside iconic scenes from the pages of famous British children’s books.

“I wanted to create that feeling you get when you’re reading a book and cease to be aware you’re looking at marks on a white page, as you’re moving around in that world,” said Pickin. “It’s fully imagined in your head and you’re immersed in the story.”

Visiting the museum is a highly interactive experience: visitors can brush past fur coats in a wardrobe to emerge in Narnia, cut open a portal to Pullman’s Oxford using the Subtle Knife, play Poohsticks on a bridge over a hi-tech river, peer down an earth-filled rabbit hole in Wonderland, sit on the Snowman’s sofa and explore Horrid Henry’s bedroom. It also offers inviting spaces for live storytelling session by speciallytrained guides as well as by the children and their family members.

If you concentrate on the story, it does the hard work for you. But somehow, we’ve lost our way with that Caroline Jones, co-director, the Story Museum

“When you see an adult and a child curled up on our giant bed with a book and cuddly toys related to the story, you know they’re having a very special moment together,” said Pickin, adding that inspiring parents and children to connect other through stories is part of the museum’s mission. “We’re very keen to turn our visitors into storytellers in some form or other while they’re here.”

As well as a fun day out that triggers “feelings of wonder and delight” in readers of all ages, she hopes the museum will help transform the way digital-savvy children perceive stories and books. “We hope people will discover that stories are important and very rich and varied, and that it’s great to grow up with a range of stories in different forms and from different places and times.”

She is critical of the government’s approach to children’s literature in schools. “There are really inspiring teachers out there, but they’re pushed for time and resources, and school library budgets are being cut.”

The Time for Bed installation, inspired by Helen Cooper’s picture book The Baby Who Wouldn’t Go to Bed. Photograph: Andrew Walmsley

Her co-director, Caroline Jones, is also concerned: “When you think about what teachers face on a day-to-day basis, the thing that is most easily engineered out of the classroom experience is any notion of imagination or creativity. How do you squeeze the joy out of a book? You ignore the story and concentrate on the phonics and mechanics of it.”

The mantra of the museum is: if in doubt, start with the story. “Actually, if you concentrate on the story, it does the hard work for you. But somehow, we’ve lost our way with that.”

The museum is carefully monitoring advice from Public Health England and hoping the coronavirus outbreak does not affect its opening date. “Particularly when things are alarming – as well as this virus, we’ve had a year of fire and floods – I’m hoping people can have a two-hour holiday in the world of story when they visit here,” says Pickin. “It’s a chance to get away from it all. Come on your own or come with people you love. We’ve had tears of joy when people step through the wardrobe.”