I could choose any number of beginnings, but the one that seems to explain most is a conversation that took place at school when I was 10 years old. I was talking to my classmate Jacob as we got changed to play cricket. Jacob was a weird kid. He had longer hair than the school rules allowed. He smelled funny and had peculiar facts at his disposal, to do with ancient languages and the sexual habits of dinosaurs. He made no secret of his scorn for cricket. He was, it goes without saying, not popular. I was telling him about the cosmic greatness of The Lord of the Rings, a book which at that point I considered the alpha and omega of world literature. "It's good," Jacob allowed. "But have you read Dune?" I'd never even heard of Frank Herbert, or his saga of rebellion on a desert planet. Jacob mentioned a couple of other writers, both unknown to me. "You should go to Dark They Were, and Golden-Eyed," he said.

I was impressed. That was the name of a place? A shop, Jacob said, specialising in science fiction. Books and comics, fanzines. It was named, he told me, with the air of someone imparting vital knowledge, after a short story by Ray Bradbury. I don't know how long it was before I found my way to Dark They Were. At weekends I was allowed to take the tube up to central London, where I'd wander round the British Museum or the trashy souvenir shops on the Tottenham Court Road. But I did find it, in an alley off Wardour Street. I have only the vaguest memory of what it was like, overlayed by other memories of the many such places I've been in since – the grimy floor, the racks of publications, the supercilious staff, always ready with an acid remark or an eye-roll to show a prepubescent newbie his lowly place on the ladder of fandom. Almost certainly I didn't buy anything. I expect I self-consciously perused the shelves, made mental Christmas present notes, then left.

It was my first experience of a subculture. I was hooked, not just by the content, but by the realisation there was stuff out there being made and thought and done that wasn't visible on the TV screens of suburban Essex. As I got older I became a kind of subcultural junkie, foraging around in music, street fashion and eventually art, politics and the freakier reaches of the internet, hunting the next discovery, the next seam of underground gold. But in my early teens, science fiction and fantasy had an almost-total hold over my imagination. Their outcast status was part of their appeal. The cool kids held them in disdain. It was territory I could own. When I wasn't reading about alternate realities I was trying to live inside one, playing Dungeons and Dragons or Traveller or Call of Cthulhu or Bushido, games that allowed me to inhabit ancient Japan or deep space or various arcane fantasy worlds.

Most of my books came from charity shops or the Whipps Cross Hospital fête, where my dad – who as a doctor was expected to put his hand in his pocket on such occasions – would give me pound notes to convert into teetering piles of paperbacks. There was something so much more interesting about these books, fished out of crates and cardboard boxes, than the ones in the library, let alone the expensive, sensible fare which seemed to be on sale in ordinary bookshops. They were musty-smelling 10p messages from the futuristic past, complete with cover designs (and content) that were unlike anything I'd seen before.

I'm fairly certain that this was how I first came across Michael Moorcock, in an early-70s Mayflower paperback, with a psychedelic cover by Bob Haberfield. Soon I was combing London for these editions, which I've carried through numerous house-moves, keeping them even after I ditched the majority of my SF and fantasy collection in favour of student bookshelf-adornments intended to attract potential sexual partners. That first crucial title could well have been Moorcock's 1968 novel The Final Programme. Haberfield's cover for this is one part Bosch, one part pop-art and one part Tibetan tantra. A naked woman, hair in flames, lies in a kind of amniotic ocean, her breasts rising up with architectural impressiveness. From her open mouth pours a carnivalesque stream of figures – rock musicians, ringmasters, rapists and murderers, businessmen, freaks and addicts of all kinds. She's flanked by twin skeletons, a pope and a king. Behind her some kind of skyscraper is shattering under the influence of beams of cosmic energy. The writing behind this cover was itself an orgiastic riot, featuring the adventures of one Jerry Cornelius, a hipster secret agent in swinging London, who seemed to jump into bed with men and women, and who appeared, shockingly, to be aware of himself as a character in a novel. As far as I could follow the plot, it concerned Cornelius's attempt to rescue his brother from some kind of peril, but then diverted into something really weird, involving Cornelius being fused in mystical union with an evil sexpot called Miss Brunner, from which he emerged as a hermaphrodite, the world's "first all-purpose human being". The Lord of the Rings it wasn't.

In retrospect, it's easy to place The Final Programme as a product of the same culture (and period) that spawned Gravity's Rainbow, Trout Fishing in America, Giles Goat-Boy and The Atrocity Exhibition – part of the headspace opened up by the associative riffs and "routines" of William Burroughs's The Naked Lunch. But at the age of 12, this was my first clue that anything like it even existed. It blew (as they say) my tiny mind. Through Moorcock I was introduced to a whole set of countercultural possibilities, as well as to the idea that writing didn't have to conform to – well, to anything really.

I soon discovered that the Cornelius novels were only a tiny corner of Moorcock's sprawling oeuvre. There seemed to be innumerable books, most of them with some kind of fantastical setting, often featuring heroes with names that appeared to echo Cornelius – Jherek Carnelian, Erekose, Elric, Corum. There were books that were straightforward genre works, books which fused, pastiched or even created genres (his 1971 novel Warlord of the Air, with its alternate-world Edwardian setting, can lay claim to being the first steampunk novel) and books that belonged to no genre at all. The quality varied – I later found out that Moorcock was capable of writing 15,000 words a day and had produced some of his slighter works in as little as three days. Other books are high literature. The Dancers at the End of Time trilogy is one of the great postwar English fantasies. In 1977 The Condition of Muzak was awarded the Guardian Fiction prize, and Mother London, an intricate and affecting love letter to the city, was shortlisted for the 1988 Whitbread award.

Moorcock's biography reads like a rebuke to every wannabe novelist who's pottering through a creative writing MFA. At 16 he got a job editing Tarzan Adventures, moving on to write pulp detective fiction for Fleetway's Sexton Blake Library. His first novel was published in 1961, when he was 23, by which time he was already a veteran writer. In 1963 he became editor of New Worlds magazine, using it to transform science fiction, moving the genre away from the "golden age" of rayguns and spaceships towards a concern with psychology, the mass media and altered states of consciousness. By the late 60s he was a pivotal figure in London's underground scene, a point of contact between science fiction novelists such as JG Ballard and Brian Aldiss and the musicians and artists who were transforming British pop culture. He became a lyricist and occasional performer with the west London psychedelic band Hawkwind, while in New Worlds he was publishing writers such as Thomas Pynchon, Christopher Logue and George Macbeth alongside Ballard, Harlan Ellison, Philip José Farmer and M John Harrison. Since the New Worlds days he has carried on writing at a furious pace, weaving an ever more complex web of novels and stories, filled with associations, refractions and knowing references, a delightful maze for his fans and a source of perplexity for bibliographers. This prolific, promiscuous output is perhaps one reason he's not accorded the status he deserves in the postwar canon of English literature. Unlike his friend Ballard, whose reputation has been transformed in recent years, Moorcock remains something of an outsider, regarded with trepidation (if he's known at all) by a literary establishment that prefers clear blue water between literature and genre writing.

These days Moorcock lives in Texas, in the town of Bastrop, just outside Austin. It's always a risk to meet one's heroes, and a small Texas town seemed an inhospitable spot for a writer who, throughout all his multifarious work, has retained a specifically English sensibility. Mummery, the knowingly named central character of Mother London (who shares much biographical information with his creator), says "London is my mother, source of most of my ambivalences and most of my loyalties." I wondered if I would find a writer in exile, or adrift.

Instead, I discover Moorcock with his feet up in the den of a charming Victorian house, surrounded by books, cats and a clutter of antique furniture. He is tall, impressively bearded, though less Falstaffian than some of his publicity photos. Why did he and his wife move to Texas? "We'd lived in England for 15 years, and Linda was sick of it. She used to get shit all the time just for being American. I didn't want to live somewhere that was an enclave of the British abroad. I thought: where am I going to get the most experience and hear what people really think?"

I ask how he came to be an editor at such a young age. "I'd started doing fanzines from the age of nine. I'd been doing as many copies as you can get carbon paper into an upright typewriter and I'd try to sell them at school." He was a fan of school stories, particularly PG Wodehouse, and when he ran out of stories in book form he started buying old magazines from dealers, eventually coming into contact with a fan subculture, much as I did many years later. "If you were interested in popular fiction, the only place where it was discussed at all was in fanzines. It gradually put you in touch with other people. It was like a very slow-working internet."

These old-fashioned stories must have been remote from his own school experience. "Oh, totally. I was expelled from a Rudolf Steiner school. I was the only person ever expelled until quite recently. I kept running away. Looking back it was pure separation anxiety. My father had buggered off at a very early age. I had this funny family. At one end they were breeding dogs in south-east London – for greyhound racing – and at the other my uncle was living in Downing Street. And I would actually go to Downing Street, which didn't strike me as funny. I'd get on the number 15 bus."

Moorcock then tells an anecdote about this uncle who'd been Winston Churchill's secretary and served a succession of prime ministers. It's a piece of back story he gives to Mummery in Mother London. Throughout our conversation there's a kind of free-associative drift, as one thing tumbles into another. Biography melds with fiction. It's a quality one also finds in Moorcock's work. As he published at breakneck pace during the 1970s, he came up with the notion of the "multiverse", a kaleidoscope of interconnected parallel realities. His various fictional heroes all became avatars of a single hero, the "Eternal Champion" who struggles for the cosmic balance between Law and Chaos. This metaphysics is sometimes explicit in his novels, often not. Moorcock soon invited other writers to set stories in his worlds, a cheerful openness which is one of his salient characteristics.

Moorcock's "funny family" gave him an outsider's perspective on postwar England. He was a rebellious teenager, something he thinks of as a family trait. "I really did have a very egalitarian upbringing."

At Fleetway, the publisher of the Eagle, Look and Learn and innumerable cowboy, detective and superhero comics, Moorcock's anti-authoritarian streak continued. Violent second world war stories were a mainstay of Fleetway's output, featuring square-jawed Tommies bayoneting craven Germans while snarling xenophobic insults. When Moorcock refused to write for these titles, "they decided I was a communist. But the boss of my department wouldn't fire me, because he was convinced the Red Army was going to come marching up Fleet Street any minute, and there I'd be with my Makarov pistol and my rimless glasses, lining people up to be shot. They kept me on as a kind of insurance." Another Fleetway executive was "a raging fascist", an ex-member of Mosley's blackshirts. Moorcock, who was a member of the West London Anti-fascist Youth Committee, once found him closeted in his office, drawing a world map to illustrate a proposed racial resettlement plan. The British got all of Africa. During this time, Moorcock also infiltrated Colin Jordan's British National party, posing as a young recruit and going for tea with the elderly widow of Arnold Leese, an infamous far-right politician who regarded his rival Mosley as a "kosher fascist". "It was a bit like The Man Who Was Thursday. There were three of us who'd go and see her and we were all infiltrators. Not one of us was an actual follower. She'd pour out the tea and say 'you know the Jews did so and so' and we'd pretend to agree with her."

Moorcock has an initially perplexing relationship to literary Englishness. On the one hand, he's steeped in the conservative canon of popular fiction, from the boarding-school stories he loved as a child to the various upright chaps – from Sexton Blake to world war one flying aces – he channelled for Fleetway. On the other, he has a strong anarchist streak and is deeply hostile to the Christian pastoral fantasy tradition of JRR Tolkien and CS Lewis. His own fantasy writing has always delighted in ambiguity, in contrast to the nursery-school morality of much of the genre. In a 1978 essay he skewered The Lord of the Rings, calling it "Winnie-the-Pooh, posing as an epic." He derided Tolkien's "petit bourgeois" artisan-hobbits, who are portrayed in the novel as a "bulwark against chaos", standing for "solid good sense" against the evil industrial-worker orcs. Tolkien's work, he writes, is nothing more than "a pernicious confirmation of the values of a morally bankrupt middle class", something not so far from the fascism he had agitated against as a young activist. Against Tolkien, Moorcock has always championed the work of Mervyn Peake, whose Gormenghast books were informed by his experience as one of the first civilians to enter the concentration camp at Bergen-Belsen. Peake's work is shot through with an uncanny darkness, a tone which Moorcock (who as a young man was a friend of Peake) often adopts. I ask him why he dislikes Tolkien and the Inklings so much. "It would be the same if we were talking about Warwick Deeping or RC Sherriff. It's the British character sentimentalised, the illusion of decency, that whole nonsense of 'no British boy would do this sort of thing'. It was also the tone of the BBC when I was growing up. I hated it."

In contrast to the rural decencies of Tolkien, Moorcock's writing belongs to an urban tradition, which celebrates the fantastical city as a place of chance and mystery. The wondrous spaces of M John Harrison, China Miéville, Fritz Leiber, Gene Wolfe and Alan Moore are all part of this, as are Iain Sinclair's London, Judge Dredd's Mega-City One, the part-virtual cyberpunk mazes of William Gibson and the decadent Paris of the Baudelarian flâneur. Like these other urban fantasists, Moorcock delights in a kind of sublime palimpsest, in imagining an environment that through size, age, scale or complexity exceeds our comprehension, producing fear and awe. Crucially, the city isn't a place of moral clarity.

Moorcock's dislike of authoritarian sentiment has led him in many directions: Jerry Cornelius's ambiguity is sexual, social and even ontological; one of Moorcock's most popular heroes, Elric, was written as a rebuke to the bluff, muscular goody-goodies that populate so much fantasy fiction. Elric, a decadent albino weakling, is amoral, perhaps even evil. As a not-so-metaphorical junkie, Elric allowed Moorcock to revel in unwholesomeness, and helped return fantasy to its roots in the late romanticism of the decadents, a literary school close to Moorcock's heart. In a recent introduction to The Dancers at the End of Time, which is set in a decadent far future, Moorcock claims to have sported Wildean green carnations as a teenager, not to mention "the first pair of Edwardian flared trousers (made by Burton) as well as the first high-button frock coat to be seen in London since 1910". Elric, much less robust than his creator, who admits his dandyish threads gave him "the bluff domestic air of a Hamburg Zeppelin commander", is part Maldoror, part Yellow Book poseur and part William Burroughs; within a few years of his first appearance in 1961, British culture suddenly seemed to be producing real-life Elrics by the dozen, as Keith Richards, Jimmy Page and others defined an image of the English rock star as an effeminate, velvet-clad lotus-eater. Moorcock was very popular among musicians, and it's tempting to see him as co-creator of the butterfly-on-a-wheel character, which still wanders the halls of English culture in guises ranging from Sebastian Horsley to Russell Brand. I ask him whether he felt at the time that the 60s rockers were living out a role he'd imagined. He's too modest to agree, but tells an anecdote that seems to sum up psychedelic London's openness to fantasy of all kinds. "I'm in the Mountain grill on the Portobello Road, where everyone used to meet to get on the tour buses. I'm sitting there, and this bloke called Geronimo is trying to sell me some dope. He says 'have you heard about the tunnel under Ladbroke Grove?'. He starts to elaborate, about how it's under the Poor Clares nunnery, and you can go into that and come out in an entirely different world. I said to him, 'Geronimo, I think I wrote that'. It didn't seem to bother him much."

Younger than most of the writers who were remaking postwar British science fiction, Moorcock acted as an important conduit between the SF chaps (still, judging by contemporary pictures, pipe-smoking collar-and-tie types) and the denizens of the music and art scenes. "At first I was the only one," he says. "Then the people who worked on New Worlds started coming in. They shared the lifestyle. When I first met Tom Disch, he'd got stuck in Spain because he contracted hepatitis from taking bad acid. Soon all of the really good writers on New Worlds apart from Jimmy [Ballard] and Brian [Aldiss] had basically had the same cultural experience as I did."

Moorcock's good friend Ballard was reluctant to leave his suburban lair in Shepperton, and relied on Moorcock to introduce him to people and experiences useful for his fiction. In the early 80s, when Moorcock was living in LA, he wrote Ballard a series of long descriptive letters about the city, which were later published as Letters from Hollywood. "I was," Moorcock says, "his running-boy for experience." In the late-60s west London melting-pot, it was Moorcock who introduced Ballard to pop artists such as Eduardo Paolozzi and who brokered uneasy meetings between his whisky-drinking, socially-awkward friend and loon-panted extroverts like Hawkwind's Nik Turner, who had a predilection for make-up, strong drugs and ancient Egyptian stage outfits. Occasionally, Ballard would "dip in" to the scene, with mixed results.

"I got Jimmy some acid one time," Moorcock reminisces, with a grimace. "He insisted. I got him a sugar cube and I said to him 'don't take it now' because he was as drunk as a skunk. And of course, being Jimmy, he took it immediately. Appalling, psychotic – snakes all over the bed. Everything bad about Shanghai on top of everything bad about everything else. He didn't describe this. His girlfriend at the time told me about it. She was basically saying, for God's sake don't give him any more. And I didn't. It would have been a waste."

The friendship between Ballard and Moorcock – two writers with overlapping but extremely different styles and concerns – is gradually emerging as one of the most important in the literary underground of late 60s and early 70s London. At a time when English fiction was dominated by well-crafted realism, the two of them were on a mission to revitalise it (or undermine it, depending on your point of view) through the medium of SF, which as the most despised of all literary genres, was also the most open to experiment. "Jimmy did it from the point of view of surrealism, which was his great love, and I did it from absurdism, which was mine." Moorcock evidently has some difficulty with the post-mortem transformation of his old friend into a kind of cultural plaster saint. "It's a pretty strange thing to see a friend turn into – he was somebody pretty different to the image the world's got." Moorcock's Ballard is a much darker and more damaged figure than the public image of the widowed father, dreaming his fantastical dreams between the morning and afternoon school runs. "We were estranged for some time because of his treatment of women. I got sick of it. When I finally said something, this being Jimmy, he withdrew completely – bingo, I wasn't there any more." Much of Ballard's bad behaviour was related to his drinking, and it's evident that Moorcock feels he would have been better off with less scotch and more pot. However, "he did come out of it. He eventually emerged on the other side. I have to say that most of his best writing was done during this particular period, when he was incredibly miserable."

Moorcock steered New Worlds towards a set of concerns that chimed with the times; this was the period ruled by Marshal McLuhan and RD Laing, and the exploration of "inner space" seemed just as interesting as the "outer space" of satellites and moonshots. This turn was controversial, not just with die-hard pulp fans, but, surprisingly, with people such as the pop artist Richard Hamilton, another denizen of the London scene. "He thought we were turning science fiction into something namby-pamby, losing its roots," Moorcock says. "He wanted explosions and spaceships and robots." It also led to censorship troubles, as WH Smith refused to distribute the title, claiming that it was pornographic. The controversy eventually led to a question being asked in the House of Commons, concerning New Worlds's receipt of a small Arts Council grant. Moorcock considers it all rank hypocrisy, noting that at the time Smiths was perfectly happy to distribute actual soft porn.

New Worlds was one of the few venues that brought experimental writing to a large audience. Many of the writers Moorcock was commissioning hadn't written science fiction before, and he also encouraged veteran SF writers to strip their stories of genre elements which they'd included so conventional SF magazines would buy their work. There was a remarkable overlap with Ambit, the small-circulation literary magazine for which Ballard was fiction editor. Moorcock remembers parties where William Burroughs would be in the same room as Arthur C Clarke, not a combination that usually springs to mind. But Moorcock wanted New Worlds to be a commercial magazine and was scornful of the attempts of Ambit's high-cultural coterie to keep up with the rapid changes in the underground scene. "It was like the mums and dads getting really enthusiastic about what their kids were into." He remembers being invited to UEA, where Malcolm Bradbury's crowd would pump him for news. "I was like the barbarian, the vital outsider. I should have been playing a banjo."

The literary culture in which Moorcock, Ballard and their peers could make a living from magazine serialisations seems as distant now, in the era of the internet, as the Grub Street of the 18th century to which it bears a more than passing resemblance. I ask Moorcock about his famous 15,000 daily word-rate. How on earth is it possible to produce so much? "It's all planning. I'd have been in bed for three days, during which I've had time to sketch out the story. Then I spring out of bed and I've got a straight nine to five – or nine to six or seven – regime, which frequently includes taking the kids to school, then I just sit down and go through with an hour break for lunch." He makes it sound deceptively simple, though not without its side-effects. "When you write that fast the book really does start to write you, you get high on the book. It's partly lack of sleep, it's partly the sugar – in my case I only had strong black coffee because it kept me going." Apart from stimulants, the other key is "formula. You have to have a formula that's absolutely strong enough to hold anything. That's where people like me are very fortunate. I have a kind of innate sense of structure, which also makes me a good mimic. It's very close to mathematics. When I wrote a computer game a few years ago, it was in some ways the easiest job I'd ever had because it's all structure, and the guys know it has to be. If you're talking to a Hollywood person they never know what they're doing structurally. They ask for changes and everything falls apart, but computer game people are just perfect because they know the purpose of every element."

After the manic productivity of the 60s and 70s, Moorcock slowed down (slightly) during the 80s and 90s, producing increasingly literary and complex picaresques, such as the tetralogy featuring Captain Pyat, an anti-hero whose peregrinations through the 20th century take him from the Russian revolution to a flat on the Portobello Road, where he tells his unlikely tale to a writer called Moorcock. However, despite productions like the Pyat books, which are maximalist fables of the type that have made global stars out of Pynchon or Rushdie, Moorcock has never shown any interest in eschewing genre. He seems to see little difference between his various kinds of production. I ask what he's working on now and he begins to frown, saying it's the hardest thing he's done for a while. "It's not easy. And I didn't start it for a long time. It's their fault. They didn't send me a contract for ages. I can't write without a contract – old habit." Winningly, this turned out to be not some literary project, but a Doctor Who novel. Elements of Moorcock's multiverse have been incorporated by other writers into Doctor Who stories. Moorcock blends the two things together, adding yet another layer of complexity to his oeuvre.

The plot of The Coming of the Terraphiles finds the Doctor "abroad in the multiverse", and concerns "an object which will save it, putting Law and Chaos back into synch. I've tried to write much of it in a sub-Wodehousian style and with a musical comedy sub-plot involving a game that's a mixture of cricket and archery." In its skewed, carnivalesque Englishness, this sounds like vintage Moorcock. I note that the book includes a pirate called Cornelius. "Yes, and incidentally one of the 'decent chaps' is called Hari Agincourt. He's not a prince but he ends up an earl. Damn. It's all supposed to be embargoed. Now they'll probably have to kill us both."