The author, whose His Dark Materials trilogy alone has been translated into 40 languages and sold millions, talks about what children look for in stories

"If you want your children to be intelligent," Albert Einstein once remarked, "read them fairytales. If you want them to be more intelligent, read them more fairytales." It is a sentiment with which Philip Pullman heartily agrees. Which is as well, because his latest bestseller is a highly acclaimed and high-voltage retelling of 50 Grimm brothers fairytales.

"Fairy stories," Pullman says, sitting on the sofa in his comfortable Oxfordshire farmhouse, "loosen the chains of the imagination. They give you things to think with – images to think with – and the sense that all kinds of things are possible. While at the same time being ridiculous or terrifying or consolatory. Or something else altogether, as well."

Not everyone of a scientific bent would, he concedes, necessarily concur. Richard Dawkins, for one, has said he is not at all sure of the effect on children of "bringing them up to believe in spells and wizards and magic wands and things turning into other things". It is all "very unscientific", Dawkins frets.

But Pullman, who is not only one of our greatest authors, for children and adults – His Dark Materials has sold more than 15m copies and been translated into 40 languages – but also a writer whose work teems with the paraphernalia of the folktale (witches, daemons, talking animals, magical objects), is firmly with Einstein. "Dawkins is wrong to be anxious," he says. "Frogs don't really turn into princes. That's not what's really happening. It's 'Let's pretend'; 'What if'; that kind of thing. It's completely harmless. On the contrary, it's helpful and encouraging to the imagination."

We are talking, a couple of weeks before the release of the paperback edition of the author's Grimm Tales for Young and Old, about fairy stories, and wondering just what it is about them that explains their enduring appeal for the young and the not-so-young. Later, the talk turns to stories in general, and why the reading and the telling of them is so extraordinarily important for children and their families. But first, fairytales. What makes them so special?

Whatever Dawkins may fear, it is not the magic, the supernatural. "That's helpful in the technical sense, in that it helps you get things done quickly and without explanation," Pullman says. "But it's not actually necessary. Some of the best fairytales in this book, like The Robber Bridegroom, have no magic at all. It's simply about getting on with the story: 'Why is this frog talking?' 'Because he's really a prince.' 'Ah, I see, it's magic. OK then, on with the story.'"

And in a fairytale, getting on with the story is all. The modern novel, for adults or for children, attempts a degree of "psychological depth," says Pullman. "It presents believable people who do believable things in believable ways. But the fairytale isn't in the business of psychological depth, it's in the business of extraordinary event following extraordinary event. Anything else would just get in the way."

There are, then, notes Pullman, very few fairytales – very few folk stories of any kind – in which characters' feelings are explored in any meaningful sense: "In fact they might as well not have feelings. Indeed, they might just as well not have thoughts. They just … do things."

Psychology, motivation, rounded character: those aren't all that fairytales leave out. They also, more often than not, neglect to give you anything you might generally expect in the way of background, context or explanation.

"'Once upon a time there was a farmer who had three sons,'" begins Pullman. "There you go: you're off. That's all you need. You don't go into the backstory. You don't say where this was because it doesn't matter where it was. You don't say what the sons were called, because that doesn't matter either: the eldest son, the middle son, the youngest son."

All of which means you can't and – despite countless efforts to interpret them by everyone from Freudians to feminists – shouldn't try to read a fairytale "in the way you read Middlemarch or Proust or whoever. A fairytale isn't a text in the literary sense. It's not made out of words so carefully chosen that no other word would do. It's made out of events."

Is that what appeals to children? The sheer, uncomplicated story-ness of the fairytale, its headlong rush to an ending, its complete absence of diversion, explanation or even emotion, its unquestioning cardboard cutout characters, their ever-astonishing deeds? In part, certainly, Pullman says. But the real attraction of the fairytale for children lies elsewhere, he believes.

"I think it's to do with justice," he says. "Children have a profound and unshakeable belief that things have got to be fair. They like stories in which the good people are rewarded, and the bad punished. And that's a characteristic certainly of the Grimm tales, and of many other folk tales too."

There is other stuff children love about them too, of course: "They like the golden hair coming down from the tower, they like the little girl being chased by the wolf, all of that. But if Little Red Riding Hood was eaten by the wolf and that was the end of the story, they wouldn't like it. These stories have to take place in a moral universe that we recognise as being right and true and just."

It doesn't matter, though, that the punishments meted out to the bad people can sometimes be rather harsh. People have their heads chopped off or their eyes pecked out, or get shoved into barrels filled with sharp nails. "All that's perfectly OK," says Pullman. "Children, even quite young children, know these things aren't true in a literal sense, but true in a different sort of sense. Really, they're just funny: 'Ooh, bet that hurt. Serve them right!'"

Something else about fairytales: if they are not literary texts – and the more literary fairytales, those of Hans Christian Andersen or Oscar Wilde, Pullman "doesn't care for at all" – that's also because they are transcriptions of words that were originally spoken. Fairytales are oral; they beg to be told.

This is actually quite important. A long time ago, when he was training future teachers (he started out as a school teacher himself), Pullman used to ask them to "get a few stories into their heads" well enough to be able to tell them to a class without referring to the book.

"Students are always nervous about not having the book," he says. "They like the book because they can hide behind it and because if it doesn't go well they can blame the book and not themselves. I understand that. But I used to urge them to be courageous and lay it aside. Do without it."

And without exception, he says, it worked. "They would come back saying things like: 'The children weren't looking at me, they were looking at the story.' So I'd point out you can actually get quite a few stories into your head; they don't take up much room. Maybe as many as there are weeks in a school year." Then, if you clear everything away 10 minutes before the end of school on a Friday afternoon, you can start telling your stories.

"And I can absolutely guarantee," Pullman says, "that when you bump into those children 20 or 30 or 40 years later, that's what they'll remember from your lessons – your stories."

There is no reason why parents as well as teachers shouldn't have a few stories tucked away in their head, Pullman reckons. Indeed it would be a very good thing. "It used to be grandmothers," he says. "It was granny who had the stories. But you can build up your stock, your treasury, by looking at books. This one, or Katharine Briggs's British Folk Tales and Legends – marvellous, just irreplaceable."

You need to "get a little story in your head, and get it there well enough to tell it without making any big mistakes. Rehearse it. That's what I used to do, out walking the dog. Then tell it. Doesn't matter if it's to a child or a grandchild [Pullman has four, aged from two to 11], to children at a party, or to children in the back of the car who you're taking to the pool."

Once a story is secure in your head, you can maybe start to embroider it a little. "That way, you find out what you're good at," says Pullman. "It might be, for example, that you're very good at being funny, in which case your audiences will love you and beg you to carry on. I could never really do funny things. I did exciting things and dangerous things, but not funny things. But the way you learn that is by doing it."

Important as storytelling should be, though, it should not replace the bedtime book, Pullman believes. "The book is just so important," he says. "An important thing, a valuable thing. Just the sharing time, with the child and the book; and letting the book absorb the attention of the child, getting a bit scuffed, the pages being a bit ripped, scribbled on perhaps."

When you read a storybook to a child: "Don't skip the pictures. I've seen some parents race through a book, just reading the words, one eye on their watch. The way to do it is to talk about the pictures as well – ask questions."

But why exactly are the storybook, and the story, so crucially important? Pullman is as eloquent and as fervent as you might hope on this; the words pour forth and they don't stop. "I'm convinced," he says, "that these – these and nursery rhymes – are the foundations of all subsequent language skills.

"These are the fundamental things, the real basics. Our politicians talk about 'the basics' all the time, but what they mean are things that you can correct at the last minute on your word processor: spelling, punctuation, that kind of thing. But the most basic thing of all is your attitude to language.

"If your attitude to language has been generated by a parent who enjoys it with you, who sits you on their lap and reads with you and tells stories to you and sings songs with you and talks about the story with you and asks you questions and answers your questions, then you will grow up with a basic sense that language is fun. Language is for talking and sharing things and enjoying rhymes and songs and riddles and things like that.

"That's so important. I can't begin to express how important that is; the most important thing of all. A sense that language belongs to us, and we belong in it, and that it's fun to be there and we can take risks with it and say silly things in it and it doesn't matter and it's funny. All of that. If your sense of language is that it's something you've got to get correct and you mustn't get it wrong and you're going to get marked on it, judged on it, well … That's a pretty poor show."

One final thought, an afterthought really but an important one, about fairytales. Our lives begin, Pullman once observed, when we are born. But our stories begin the day we discover that we have unaccountably been born into the wrong family. "We all discover that, in our early teens usually," he says. "You have to grow up, and you have to move on. Cinderella is the template of all that kind of thing. But so many of these tales involve it, often for the most simple and basic of reasons: 'I can't afford to keep you any more.' So off you are obliged to go, in the very next paragraph. Because … well, because if you don't go, there's no story. And what a terrible fate, to have no story."

So read stories to your children, and tell them too, is Pullman's plea. In the end, he says: "It's the sense of sharing something, I think. The sense of sharing a wonder. These are wonder tales. And if you don't get all straight and anxious about them, if you let the wonder just flower and take root and enrich the child's imagination and yours, you'll be the better for it. And there we are."

The End.

Philip Pullman: the back story

Philip Pullman was born in Norwich in 1946, the son of an RAF pilot who was killed in a plane crash when Pullman was seven. He grew up largely in north Wales and graduated from Exeter College, Oxford in 1968 with a third-class degree in English. ("It was the year they stopped giving fourth-class degrees," he would later say. "Otherwise I'd have got one of those.")

He began teaching, and writing school plays, at Bishop Kirk middle school in Oxford. His first children's book, Count Karlstein, was published in 1982. He stopped being a schoolteacher around the time of his second children's book, The Ruby in the Smoke, in 1986, and took up a part-time job teaching education students at Westminster College. Northern Lights, the first volume of the fantasy trilogy His Dark Materials, was published in 1995, winning both the Carnegie medal and the Guardian children's fiction prize. Pullman has written full-time since then, winning numerous other awards including the Whitbread and the all-time "Carnegie of Carnegies" in 2007.

His Dark Materials and the subsequent The Good Man Jesus and the Scoundrel Christ have caused controversy for their perceived stance on religion and the church; Pullman has described himself as an agnostic atheist.

He is widely considered one of Britain's greatest living writers, a rare master storyteller whose books appeal to younger readers and adults alike.