In the garden of his Venice hotel, Hayao Miyazaki proves quite the celebrity. He signs autographs with a flourish, poses gamely before a barrage of photographers and excuses himself only briefly for a call of nature. "You have been called the god of anime," an Italian journalist shouts at his retreating form. "How does it feel to be a god?" He visibly flinches on his way to the loo.

In the opinion of Pixar's John Lasseter, Miyazaki is "the world's greatest living animator". According to the numbers, he is Japan's most successful film-maker, with his 2001 fable Spirited Away breaking the domestic box-office record set by Titanic. But away from the limelight this white-haired little professor leads a monastic existence (all work, no play, TV or internet). His publicist tells me that this is the first interview he has agreed to in 10 years.

Miyazaki's latest film, Howl's Moving Castle, plays out in a valley kingdom inhabited by wizards, fire demons and undulating shadow monsters in natty straw boaters. It's based on a children's book by Welsh author Diana Wynne Jones; Miyazaki has visited Wales several times and has a deep affection for the place. He was first there in 1984, witnessed the miners' strike at first hand and farmed the whole harrowing experience into his 1986 animation Laputa: Castle in the Sky. "I admired those men," he says, sitting in the sun as the photographers melt away. "I admired the way they battled to save their way of life, just as the coal miners in Japan did. Many people of my generation see the miners as a symbol; a dying breed of fighting men." He shrugs. "Now they are gone."

And here's the thing. Miyazaki, for all his fame and acclaim, could soon be following them. It is his fate to find himself hailed as the greatest practitioner of hand-drawn cell animation (perhaps the greatest there has ever been) at a time when the art form appears to be headed the way of the dodo. He seems curiously Zen about this. "If it is a dying craft we can't do anything about it. Civilisation moves on. Where are all the fresco painters now? Where are the landscape artists? What are they doing now? The world is changing. I have been very fortunate to be able to do the same job for 40 years. That's rare in any era."

This shifting world is something Miyazaki has long been fascinated by. His films feature cute creatures fighting tooth and nail to preserve their communities, and bucolic landscapes under threat of destruction. Nausicaa of the Valley of the Winds, his 1984 film, depicts a post-apocalyptic enclave menaced by toxic spores and giant insects. Princess Mononoke (1997) concerns the battle between the animals of the forest and the human developers holed up in an industrial stockade.

All drama depends on this kind of conflict. And yet Miyazaki's stance can be bizarrely even-handed. Invariably his hero or heroine is cast in the role of peacemaker, or piggy in the middle, while his supporting players are an unruly bunch. No-Face, the timid, helpful spirit in Spirited Away, blooms into an all-consuming carnivore. The wicked witch in Howl's Moving Castle winds up as a cherished family member, slumbering in her armchair like some dotty old aunt. Most children's storytellers install their characters as fixed symbols of good and evil. Miyazaki makes them bounce around like pinballs.

In 1997 the director signed a distribution deal with Disney. It was to prove a springboard to global renown, paving the way for a dedicated exhibition at New York's Museum of Modern Art and helping him secure the 2003 Oscar for Spirited Away. Even so, the nature of Miyazaki's films has been tweaked in transit. In Japan his films are blockbusters the whole family can enjoy. In Britain and the US he remains a predominantly adult, art-house phenomenon.

Miyazaki taps a cigarette from a silver case. The Disney deal suits him, he explains, because he has stuck to his guns. His refusal to grant merchandising rights means that there is no chance of any Nausicaa happy meals or Spirited Away video games. Furthermore, Disney wields no creative control. There is a rumour that when Harvey Weinstein was charged with handling the US release of Princess Mononoke, Miyazaki sent him a samurai sword in the post. Attached to the blade was a stark message: "No cuts."

The director chortles. "Actually, my producer did that. Although I did go to New York to meet this man, this Harvey Weinstein, and I was bombarded with this aggressive attack, all these demands for cuts." He smiles. "I defeated him."

Disney releases Miyazaki films in two formats: a subtitled version for the purists and a dubbed extravaganza for the popcorn crowd. Howl's Moving Castle is no exception. It features the voice of Billy Crystal as the obstreperous fire demon and Lauren Bacall as the Witch of the Wastes. This is fine, says Miyazaki, because Bacall is "a fabulous woman" who brought something to the role that home-grown actors couldn't. "All the Japanese female voice actors have voices that are very coquettish and wanting male attention, which was not what we wanted at all."

In any case, he adds, who is to say that a subtitled print is any more authentic? "When you watch the subtitled version you are probably missing just as many things. There is a layer and a nuance you're not going to get. Film crosses so many borders these days. Of course it is going to be distorted."

In the meantime Miyazaki continues to hone his traditional art-works at Ghibli, his Tokyo animation studio. In the past he has been vocal in his criticism of computer-generated imagery, describing it as "thin, shallow, fake". These days he seems to have made his peace with the beast. He admits that he likes Toy Story because it opened the doors to a new breed of animation and even admits to using CGI in his own movies (but never more than 10% of the finished print). "Actually I think CGI has the potential to equal or even surpass what the human hand can do," he says. "But it is far too late for me to try it."

His is a very serene and contented brand of fatalism. He talks about New Orleans, and Hurricane Katrina and insists that the same thing will happen in Tokyo. There are a lot of water-gates in the city, and the river runs past his home. He smiles and taps ash from his cigarette. There are too many people in the world, he says, and too many wrong turns along the way. At the age of 64, he gives the impression that the planet is doomed but he'll soon be leaving it, and not a minute too soon.

"Personally I am very pessimistic," Miyazaki says. "But when, for instance, one of my staff has a baby you can't help but bless them for a good future. Because I can't tell that child, 'Oh, you shouldn't have come into this life.' And yet I know the world is heading in a bad direction. So with those conflicting thoughts in mind, I think about what kind of films I should be making."

Perhaps this is why he tells children's stories. "Well, yes. I believe that children's souls are the inheritors of historical memory from previous generations. It's just that as they grow older and experience the everyday world that memory sinks lower and lower. I feel I need to make a film that reaches down to that level. If I could do that I would die happy."

I ask if he feels he's managed that already and he chuckles and shakes his head. Nor does he feel that film can be employed as a force for good. "Film doesn't have that kind of power," he says, gloomily. "It only exerts its influence when it stirs patriots up against other nations, or taps into aggressive, violent urges."

This is a black diagnosis indeed. But then, inexplicably, Miyazaki's mood lightens. Perhaps it's the sunshine, or the cigarette, or the fact that the interview is almost over. "Of course," he relents, "if, as artists, we try to tap into that soul level - if we say that life is worth living and the world is worth living in - then something good might come of it." He shrugs. "Maybe that's what these films are doing. They are my way of blessing the child"

· Howl's Moving Castle opens on September 23.