When Vivienne Westwood was four or five, she had an epiphany. "When I first saw a picture of the crucifixion, I lost respect for my parents. I suddenly realised that this is what the adult world is like – full of cruelty and hypocrisy." At the time she was living in the Pennine village of Tintwistle, where her father worked in the Wall's sausage factory and her mother was an assistant at the local greengrocer's. "I thought they'd been lying to me by telling me only about the baby Jesus, rather than what happened to him."

We're sitting at a table teeming with glue, scissors and drawings in her fourth-floor office at the Westwood empire HQ in Battersea. She's wearing a beautifully cut pin-striped suit, as well as dangly earrings and more makeup than usual for the benefit, she says, of the photographer. "I'll tell you what I was like as a child," says Westwood. "I was a good person. I was high-spirited but I was a big reader. What I remember as a child is that other kids didn't care about suffering. I always did."

Sixty-five years on, and Britain's most feted fashion designer is many things – mother, multimillionaire businesswoman, jauntily knickerless recipient of an OBE from the Queen, dame, happily married to a man 25 years her junior – but one thing has remained constant: her sense of her difference from the bulk of other people. "I do feel I'm fighting against conformity," she says.

As if to prove the point, she announces: "I will say something that sounds terrible. We're all going into the gas chamber, and what I'm saying is that it's not a bathroom. We're going to be killed. The human race faces mass extinction."

Westwood came to this dystopian conclusion a few years ago when she started to read the books of James Lovelock, the environmentalist most famous for proposing the Gaia hypothesis – the idea that the Earth functions as a living super-organism.

Lovelock argued that humanity's vast output of carbon dioxide over the past two centuries has prompted the deserts to spread towards the poles at an alarming rate. "I always thought we had an environmental problem," says Westwood, "but I hadn't realised how urgent it was. James Lovelock writes that by the end of this century there will be one billion people left." That's six billion dead by the end of the century. "He calls it the cull. I consider him to be a great, great, great genius, the equivalent to Darwin or Einstein, but more incredible."

She contends – on the basis of her reading of Lovelock – that once average global temperature levels rise beyond a certain point, they will spiral uncontrollably: "If they rise by two degrees they will go on to five and so on in a domino effect. Eventually, if you draw a line at the level of Paris, below that it would be uninhabitable," warns Westwood. "There'll be no more going to Florence."

We're meeting because 70-year-old Westwood has just announced she's going to give £1m to rainforest charity Cool Earth, which aims to stop such an intolerable future being realised. It's the culmination of three years' involvement with a charity established in 2007 by Labour MP Frank Field. Last year, she produced 20 tablecloth designs for the charity, selling at £1,000 each. Could posh tablecloths help save the planet?

Of all the world's good causes, why Cool Earth? I ask. "I'm going to start by talking about how I see the world," she says. "The capitalist system is about taking from the Earth and from the other great commodity, labour. What's happening with this system is that the rich are getting richer and the poor are getting poorer, and the only way out of it is supposed to be growth. But growth is debt. It's going to make the situation worse. We have got to change our ethics and our financial system and our whole way of understanding the world. It has to be a world in which people live rather than die; a sustainable world. It could be great." It could be: the vision little Vivienne beheld of human hypocrisy, cruelty and delusion 60-odd years ago need not be our destiny.

But isn't today's imperative to nail the bankers; maybe later we can save the rainforest? "It's presented as though the financial crisis and climate change are two different things, but they're connected," Westwood replies. "We're letting businessmen do what they want. People get paralysed by the enormity of wrong things in the world. There's only so much that one person can do. What I decided to do was to focus on the rainforest." In September she launched her spring/summer 2012 Red Label collection with a call to support her £7m fundraising campaign. "We must begin today – tomorrow is too late," she said then. "Governments have been talking about saving the rainforest for 40 years. Now only half of it is left."

The campaign is called No Fun Being Extinct (it surely cries out for the subtitle: "Just ask a dodo. Oh yeah – you can't.") If you go to the campaign's website (nofunbeingextinct.org) you can commit to saving three trees for £3. The campaign aims at embarrassing the World Bank for dedicating $600m (£390m) to tackle deforestation in 2008 and sitting on 90% of that money. So far, according to Cool Earth, just $15m (£10m) has been spent, all of it on administration and advisers.

Her support for Cool Earth is only one example of Westwood's rise as a political activist. She's long supported Liberty and CND, but in recent years she seems determined to support every good cause going. Her most recent blog posts detail her multifarious radical interests: she backs a fundraising campaign for the Refugee Council, pledges her support for Greener upon Thames, an organisation campaigning to make next year's London Olympics plastic-bag free, and reprints a thank-you letter from the headmaster of Uaso Nyiro primary school in Kenya for the books she sent, adding: "The school was started in 1992 but they've never had a library. Now they have and they've named it the Vivienne Westwood Library – amazing!"

But isn't there a contradiction between fighting to save the planet and charging huge sums for (admittedly very beautiful) consumer goods? "With Andreas [Kronthaler, her fashion-designer husband whom she married in 1992] we're trying to make the product quality rather than quantity," she replies. When she launched a collection in September last year, she said we should not buy new clothes for six months, which must have left her sales people wringing their hands. Or maybe not: "My message is: choose well and buy less," she said then – as if to suggest you should buy one Westwood dress rather than filling Primark trolleys regularly.

"I don't feel comfortable defending my clothes. For 15 years I hated fashion." Why? "It's not very intellectual, and I wanted to read, not make fashion. It was something I was good at; it wasn't all of me." She's never recaptured the thrill of the first fashion show she did with Malcolm McLaren at London's Olympia in 1979. It was then they launched the Pirates collection that became the template for the New Romantic look. "I watched it and I was so captivated. I had done something." But she has fallen in love with fashion design again: "I'm happy doing my work at the moment because everything is coming together." Even in her eighth decade, she cannot contemplate retiring. "I really want to carry on." She hints her husband may not, though: "Andreas is considering his position – he's a perfectionist, and that can be very stressful."

Last month she lent her support to the Occupy demonstrators outside St Paul's. When she was there she told anyone who would listen that they should go to London's art galleries to become freedom fighters against capitalism, consumerism and philistinism. Why? "It's to do with consumption – if you go to an art gallery you're putting in, not just sucking up. Propaganda can be resisted by loving art."

All this chimes with the delightfully loopy 22-page manifesto she wrote four years ago, aimed at rescuing mankind from mediocrity, called Active Resistance. In it she cited Aldous Huxley, who said the world suffers from three evils – nationalistic idolatry, non-stop distraction and organised lying. Once she thought that non-stop distraction (she doesn't watch telly) was the worst evil. Now she wants to revise that opinion. "Actually, organised lying can be the worst. It is the frame of reference that people have – that they must consume, or that politicians are speaking sense."

But why should Occupy protesters join the queues to see Leonardo at the National Gallery? "When you look at art, it's perhaps an unconscious criticism of the world we're living in, comparing a world that doesn't exist with ours. Great art is always about asking yourself if things could be better."

Her belief in the revolutionary impact of art comes, she says, from two things – her provincial upbringing and her relationship with McLaren, who died of cancer last year at 64. "It was culturally quite provincial where I came from. I didn't know about classical music or art galleries. My parents and I moved to London when I was 17, and I tried to understand the world a bit more, thinking I was stupid." She went to art college for a term to study fashion and silversmithing. Why not to university, to indulge her passion for intellectual life? "I wanted to have fun with men, and all the geeks went to college."

After art school, Vivienne Swire married Derek Westwood, a factory apprentice. They had a son, Ben, in 1963. The marriage lasted from 1962 to 1965, ending when she met the situationist student radical and future Sex Pistols manager, McLaren. At the time she was working as a primary school teacher, and making jewellery and selling it on a Portobello market stall. What was McLaren's appeal? "He was from a cosmopolitan Portuguese-Jewish family, and very attractive because he seemed to know what was going on. I had no idea." In 1967, they had a son, Joe.

When McLaren and Westwood opened their iconic King's Road boutique, the couple revolutionised style with safety pins, rips and zips and bondage trousers. They were inspired by bikers, prostitutes, fetishists. "When we did punk, his ideas weren't mine. I really wanted to help. I was interested in human rights. I started to be anti the royal family because I saw that the queen was a symbol of hypocrisy."

Today Westwood is more forgiving of the woman who ennobled her. "What do you do if your government is doing terrible things, like supporting rendition flights? You can't necessarily blame her. Maybe she's not the symbol of hypocrisy. I'm not patriotic in terms of nationalism, but I like what the royal family has done – they've given people in England an identity. I'm not saying she's terribly cultivated. Maybe she is – I don't know."

She sees Prince Charles as a kindred spirit: "He has done an amazing amount in this world. He does set standards. He brokered a rainforest deal between Guyana and Norway. He understands what makes us human is that we are able to express ourselves through culture."

Just before Westwood introduces me to a new experience (a parting kiss on the lips from a dame), she offers some advice for Guardian readers: "Try to use your time not worrying. Try to get involved. Try to get involved in seeing art then you'll be a freedom fighter, you'll be working for a better world." Is that how you see yourself? "What do I know about anything?" she smiles. "I'm only a fashion designer."