One of Germany's post-Holocaust generation, he has worked as an academic in Britain for nearly 40 years. He is also an acclaimed writer, and his genre-defying fiction - part memoir, travelogue and history - explores themes of restlessness and loss. Maya Jaggi reports

Under lowering skies in East Anglia, days after the Manhattan apocalypse, Max Sebald is troubled by Hitler's fantasy of setting New York ablaze, as the blitz did London. The spectre of the past haunts Sebald, a German born under the Third Reich, though he was a babe-in-arms on VE Day. "I was born in May 1944 in a place the war didn't get to," he says of the Bavarian village of Wertach im Algäu. "Then you find out it was the same month when Kafka's sister was deported to Auschwitz. It's bizarre; you're pushed in a pram through the flowering meadows, and a few hundred miles to the east these horrendous things are happening. It's the chronological contiguity that makes you think it is something to do with you."

Sebald has lived in Britain since 1966, forsaking the Alps for the flatlands of Norfolk, where he is professor of European literature at the University of East Anglia in Norwich. Wearing a corduroy jacket with elbow patches, he sits in a modest office in a squat concrete block. Now 57, he began publishing what he terms "prose fiction" only in his mid-40s, writing as WG Sebald (his third name is Maximilian), and always in German.

His first book to be translated into English, The Emigrants, published in 1996, came garlanded with awards from the German-speaking world and was one of the most lauded British debuts of the last decade. Susan Sontag acclaimed him as the "contemporary master of the literature of lament and mental restlessness". Translations of The Rings Of Saturn in 1998 and Vertigo in 1999 - also by the poet Michael Hulse - sealed his reputation as one of the most original literary figures of our age. For Michael Ondaatje, Sebald is "the most interesting and ambitious writer working in Britain today".

Sebald's fiction is an innovative hybrid of memoir, travelogue and history, its text scattered with grainy, black-and-white photographs without captions which lend an unsettling feel of documentary. He often uses real names, in an endless journeying saturated with European cultural allusions and metaphysical meditations on loss, exile and death. "At a time when everything is classified and marketed cynically, Sebald defies all genres," says Bryan Cheyette, professor of 20th-century literature at Southampton University. Cheyette sees him as a "post-Holocaust writer", obliquely exploring the long aftermath of the Third Reich.

His new book, Austerlitz, out in Germany last spring, is published next month in an English translation by Anthea Bell. It was bought by Penguin as part of a three-book deal worth more than £100,000. The story concerns Jacques Austerlitz, who is brought up by Welsh Calvinist foster parents and in his 50s recovers lost memories of having arrived from Prague on the Kindertransport, the lifeline to Britain of some 10,000 unaccompanied Jewish children in 1938-39. It was spurred by watching a Channel 4 documentary on Susie Bechhofer, who in mid-life remembered coming to Wales on the Kindertransport. She shared a birthday with Sebald, May 18, and was from Munich. "That was very close to home," he says.

Yet for the first half of the book the past is skirted, as Sebald explores the "effects political persecution produces in people 50 years down the line, and the complicated workings of remembering and forgetting that go with that". He is interested in the long-term effects on émigrés who "may appear well adapted but, especially as they move towards old age, are still suffering from having been ostracised, deprived of country, family, language. There are damages to people's inner lives that can never be rectified."

Austerlitz is also partly based on a real architectural historian, a friend whose boyhood photograph is on the cover. Austerlitz senses that buildings bear witness to the past, as unquiet ghosts in our midst demand redress. "Places seem to me to have some kind of memory, in that they activate memory in those who look at them," says Sebald. "It's an old notion - this isn't a good house because bad things have happened in it. Where I grew up, in a remote village at the back of a valley, the old still thought the dead needed attending to - a notion so universal it's enscribed in all religions. If you didn't, they might exact revenge upon the living. Such notions were not alien to me as a child."

Winfried Georg Maximilian Sebald was born the only son, with three sisters, of Rosa, daughter of a "country copper", and Georg, from a family of glassmakers in the Bavarian forest. At 18 his father joined the army, amid mass unemployment in 1929. When the National Socialist party took power in 1933, he "stayed and marched with it". Sebald's parents were from "conventional, Catholic, anti-communist, working-class backgrounds. They experienced upward mobility in the 1930s, like so many Germans; my father finished the war as a captain. Fascism did away with the class system - as in France under Napoleon, and in stark contrast to Britain, where it dominates the army to this day."

Georg was a prisoner of war in France. When he returned to Bavaria in 1947, Max was three. "I found it odd that this person turned up and claimed to be my father. Then he got a job in a small town and was only home on Sundays. He was a detached figure for me." Sebald doted on his grandfather, an "exceptionally kind man", who took care of him. "As a boy I felt protected. His death when I was 12 wasn't something I ever quite got over." It brought an early awareness of mortality and that the other side of life is something horrendously empty."

Like most of his generation, Sebald grew up in the "seas of silence" over the war. "It was an idyllic environment, and only at 17 or 18 did you get inklings. All I knew was that there were families where, out of five sons, none returned." His father's albums had photographs of the Polish campaign of 1939, first with a "boy-scout atmosphere" and culminating in razed villages. But the images seemed "normal" to Sebald as a child. At grammar school in the ski resort of Oberstdorf they were shown a film of the liberation of Belsen. "It was a nice spring afternoon, and there was no discussion afterwards; you didn't know what to do with it. It was a long drawn-out process to find out, which I've done persistently ever since."

While Sebald was at Freiburg University in 1965, the Frankfurt trial of Auschwitz personnel began. "It gave me an understanding of the real dimensions for the first time: the defendants were the kinds of people I'd known as neighbours - postmasters or railway workers - whereas the witnesses were people I'd never come across - Jewish people from Brooklyn or Sydney. They were a myth of the past. You found out they too had lived in Nuremberg and Stuttgart. So it gradually pieced itself together, along with the horrific details."

While Sebald discounts the notion of inherited guilt, he says: "If you know in the generation before you that your parents, your uncles and aunts were tacit accom plices, it's difficult to say you haven't anything to do with it. I've always felt I had to know what happened in detail, and to try to understand why it should have been so." He was appalled by a "concerted attempt in the first years after the war not to remember anything, for the obvious reason that those in office were implicated". A sea-change in the late-1960s was spurred by an "uprising of the next generation; there was generational war for half a decade that culminated in terrorism in Germany, which was brutally eradicated".

Yet Sebald found the resulting "official culture of mourning and remembering" flawed. "There's always an undercurrent - 'Isn't this being forced upon us? Haven't we suffered also?'" He disparages literary efforts in the 1970s and 80s to address the Nazi years, by such German writers as Alfred Andersch and Heinrich Böll. "They felt they had to say something, but it was lacking in tact or true compassion; the moral presumption is insufferable. Andersch was married to a Jewish woman from Munich, and he divorced her in about 1936, exposing her to danger. I don't think one can write from a compromised moral position." As a student, Sebald read works "from the other side of the divide: people who'd escaped by a hair's breadth, writing usually after a 20-year gap", German Jewish writers such as Peter Weiss, and the Belgian Auschwitz survivor Jean Améry. "There was a huge chasm between those voices and the immediate postwar German writers."

After studying German literature in French-speaking Switzerland, Sebald came to Manchester University as a language assistant in 1966. "I scarcely spoke English, and coming from a backwoods, I found it difficult to adapt. But I stuck it out; I got to like the place." He relished the "anti-hierarchical" new universities ("nobody bossed you around"), and moved to the fledgling University of East Anglia in 1970 to teach modern German literature. Michael Robinson, now professor of drama at UEA, remembers him as a "sardonic and challenging" lecturer. Sebald was the founding director in 1989 of the groundbreaking British Centre for Literary Translation at the university. Peter Bush, the present director, says "it took someone with Max's vision to say we needed this in Britain".

Sebald published literary criticism on figures such as the Swiss Gottfried Keller and Robert Walser. But dismay at the Thatcherite "so-called educational reforms" of the early 1980s drove him to other forms. "The pressure of work got inexorably greater, partly to do with moving up the ladder [he became professor of German] and partly because we lost staff right, left and centre. What was once a very congenial workplace became very trying."

He began with a prose poem, After Nature (1988), to be published in English next spring. (For Years Now, poems with images by the artist Tess Jaray, will be published in December.) His first prose fiction was Vertigo (1990), which spliced travels in Austria and Italy with fragments on Stendhal, Kafka, Casanova. Sontag praised it as a self-portrait of a "restless, chronically dissatisfied, harrowed mind", one "prone to hallucinations".

As in all his fiction, Sebald's narrator is one "WG Sebald", who lives in Norfolk, comes from the German village of "W", and has a companion, "Clara". Max Sebald lives in an old rectory outside Norwich with his Austrian wife, Ute. They married "very early", in 1967, and have one daughter, a school teacher. But Sebald ("I'd prefer to keep them out of it") gives only rare interviews and is obsessively private. "I don't want to talk about my trials and tribulations. Once you reveal even part of what your real problems might be in life, they come back in a deformed way." Robinson, a friend, sees the narrator as a distinct persona. "He has obvious affinities with Max, but it's playing on our naivety, because the reader is always tempted to identify the narrator with the writer. He's taunting us."

For Sebald, Vertigo is about the "problem of love, but not in a standard way". He scorns "standard novels - about relationship problems in Kensington in the late-1990s", and is irritated by "pages whose purpose is just to move the action along". Prose fiction "means each line has to be weighed as carefully, and with as much energy, as in a poem of half a page". Anthea Bell, who describes her translations as very much a collaboration with the author, finds "every word is weighed, nothing is careless in his writing".

As in Stendhal's memoir, The Life Of Henry Brulard, Sebald uses pictures, often photographs taken with "cheap little cameras". He says: "In school I was in the dark room all the time, and I've always collected stray photographs; there's a great deal of memory in them." Pointing out a small boy in an old family photograph on his office wall, he says, "he returned from the first world war mentally disturbed after electric shock therapy. This is before he knew. I find that frightful: the incapacity to know what's round the corner."

The images are tantalising relics of a past which can never be known: "There are always versions of history; the real thing we shall never grasp." AS Byatt, who sees Sebald's subject as "memory: its tenacity and fallibility", says, "he connects with immense pain, only to say you can't connect; he tries to make you imag ine things that he then delicately says are unimaginable".

On his approach to factual "material", Sebald says: "There was a vogue of documentary writing in Germany in the 70s which opened my eyes," he says. "It's an important literary invention, but it's considered an artless form. I was trying to write something saturated with material but carefully wrought, where the art manifests itself in a discreet, not too pompous fashion." The big events are true, he says, while the detail is invented to give the "effect of the real". "Every novelist combines fact and fiction," he insists. "In my case, there's more reality. But I don't think it's radically different; you work with the same tools."

For the writer Eva Hoffman, this blurred boundary between artifice and reality, memory and history, is "embedded in his tone - one doesn't know what's fact or fiction". That uncertainty, fuelled by forged documents or suspect portraits, is Sebald's aim. "It's the opposite of suspending disbelief and being swept along by the action, which", he says drily, "is perhaps not the highest form of mental activity; it's to constantly ask, 'What happened to these people, what might they have felt like?' You can generate a similar state of mind in the reader by making them uncertain."

The impulse to question, fostered by his work, is a virtue not only of the reader but the citizen. Passages in Austerlitz on the infamous ghetto of Theresienstadt, north-west of Prague, which the Nazis passed off as a model town to the Red Cross, draw on the painstaking record of HG Adler. "When you read the fascist jargon they evolved in 10 years, you can't believe your ears. You need that tension between documentary evidence and questioning in the reader's mind: 'Can it really have been so?'" To read with vigilance is to question authority. In contrast to 19th-century novelists, who were "at pains to tell you this was a true story", Sebald layers his narration; we learn things indirectly, unreliably: "I try to let people talk for themselves, so the narrator is only the one who brings the tale but doesn't instal himself in it. There's still fiction with an anonymous narrator who knows everything , which seems to me preposterous. I content myself with the role of the messenger."

The Emigrants (1993), which gradually links the stories of four displaced Germans to the Holocaust, emerged when Sebald learned of the suicide of one of his teachers not long after Jean Améry killed himself in 1978. In the tale of the schoolmaster, who is "one-quarter Jewish, as they used to say", he sifted memories of the silence and "normality" of his own village, mindful of the "great time lag between the infliction of injustice and when it finally overwhelms you".

The writer Linda Grant was struck by "calm prose that packed an extraordinary emotional charge, but you couldn't see how it was done. There are no fireworks, he's the opposite of showy, but he does something magical." He is free, she adds, of a "tendency to sentimentalise when non-Jews write about the Holocaust". Byatt finds the tone "perfectly judged: it's a mournful, crab-wise, tactful way of getting at history, making tiny steps before he puts the knife in. The primary emotions are not anger but grief and tragic terror." By contrast, the German novelist Georg Klein detests what he sees as Sebald's "sweet melancholic masochism towards the past", which claims a "false intimacy with the dead".

Sebald has his own scruples about the "morally questionable process of falsification. We're brought up to tell the truth, but as a writer you're an accomplished liar. You persuade yourself it's to achieve a certain end. But there's a problem in departing from the literal truth to achieve an effect - in the worst case, melodrama, where you make someone cry. It's a vice."

He is conscious of the danger of usurping others' existences. While all four emigrants are based on real people, the painter Max Ferber, who obsessively scratches out then redoes his work, is a composite of Sebald's Mancunian landlord ("I found out he'd skiied in the same places as I had") and the London-based artist Frank Auerbach. Without naming Auerbach, Sebald says he felt he had the right - "because the information on his manner of work is from a published source". Auerbach, however, refused to allow his paintings to appear in the English edition. Sebald modified the character's name from Max Aurach in the German. "I withdraw if I get any sense of the person's discomfort," he says.

Hoffman admires Sebald's delicacy. "He doesn't feel an entitlement to go at history frontally; he goes at it from an oblique angle". As Sebald says: "Do I, who carry a German passport and have two German parents, have the right? I try to do it as well as I can. If the reactions were different, I would stop - you do take notice." (That tentativeness perhaps carries to his view of Israel. "The situation is deplorable, there's no question. But it's an issue I've avoided.") In Byatt's view, "Sebald's generation weren't involved in the war, but they've had to look at their own parents with horror. They're a wandering, lost generation that felt they had no right to speak. He's started speaking painfully out of that silence."

One strategy is to avoid the sensational. "The details of Susie Bechhofer's life, with child abuse in a Calvinist Welsh home, are far more horrific than anything in Austerlitz. But I didn't want to make use of it because I haven't the right. I try to keep at a distance and never invade," Sebald says. "I don't think you can focus on the horror of the Holocaust. It's like the head of the Medusa: you carry it with you in a sack, but if you looked at it you'd be petrified. I was trying to write the lives of some people who'd survived - the 'lucky ones'. If they were so fraught, you can extrapolate. But I didn't see it; I only know things indirectly."

Sebald loathes the term "Holocaust literature" ("it's a dreadful idea that you can have a sub-genre and make a speciality out of it; it's grotesque"). While he commends Claude Lanzmann's documentary Shoah (1985), he is doubtful about recreations. "It can only become an obscenity, like Schindler's List, where you know the extras who get mown down will be drinking Coca- Cola after the filming." In the Emigrants, it is the slow accretion of fictional details of an annihilated culture that fuels an overwhelming sense of loss. "It's full of an ache for the past," says Grant, "something destroyed, not just for Jews but for Germans." It may partly be an awareness of that lingering absence that repels Sebald from Germany. "As a consequence of persecution, the country is much poorer," he says. "It's more homogeneous than other European nations."

He has turned down job offers at German universities, but says: "The longer I've stayed here, the less I feel at home. In Germany, they think I'm a native but I feel at least as distant there. My ideal station", he half smiles, "is possibly a hotel in Switzerland."

He travels almost monthly to the continent, "digging around" in archives, "servicing" his books with readings and appearances ("I try to keep this to a minimum") or visiting friends and relatives. His sisters live in French- and German-speaking Switzerland, while his mother is still alive in Sonthofen, Bavaria. "Going home is not necessarily a wonderful experience," he says. "It always comes with a sense of loss, and makes you so conscious of the inexorable passage of time." He adds: "If you're based in two places, on a bad day you see only the disadvantages everywhere. On a bad day, returning to Germany brings back all kinds of spectres from the past."

In The Rings Of Saturn (1995), subtitled in German "an English pilgrimage", WG takes a rucksack on a walking trip across East Anglia to "dispel emptiness". He discerns destruction and the dark undercurrents of European history all around. His mind travels from Conrad's sojourn in Lowestoft to the Belgian Congo, whose slave labour foreshadowed the concentration camps. Britain has its own amnesia about an imperial past, and Sebald has said he finds the English "not so obviously guilty".

The Rings Of Saturn reveals links between beauty and brutality. "Culture is not the antidote to the mayhem we wreak - expanding the economy or waging wars," says Sebald. "Art is a way of laundering money. It still goes on." He cites the slave-driven sugar profits that built the Tate. "It's more obvious with art because it's an expensive commodity. But literature is also affirmative of society - it oils the wheels."

Austerlitz too explores the link between architecture and fascism. "The Nazis had megalomaniac fantasies which Speer, the court architect, was going to realise," says Sebald, who grew up near the Sonthofen Ordensburg, a former college for the Nazi elite. "There were concerts, and you were dwarfed by the architecture of power-crazed minds. It was prefigured by the bombast of the 19th-century bourgeois style - it always comes from somewhere. These vast edifices depended on slave labour. The SS ran quarries next to concentration camps. It's not an accidental link."

A year after his travels along the coast, the narrator in The Rings Of Saturn is "taken into hospital in Norwich in a state of almost total immobility". While one reviewer assumed he had been incarcerated in a mental asylum, Sebald explains: "Walking along the seashore was not comfortable - one foot was always lower than the other. I had a pain, and the following summer, I stretched, and something broke in my back." Threatened with paralysis, he had a four-hour operation for a shattered disc. "They mended me pretty well."

Some found comedy in the morose narrator, an afflicted writer battling foul weather and fouler hotels, who was parodied in Private Eye as an Eeyore-like figure of gloom. It is an image Sebald himself laughs at. Evoking a boyhood photograph of his mother looking brightly at the camera and "me being my usual self", he pulls an absurdly lugubrious face. His sombre reserve is relieved by a kindliness, deadpan wit and occasional flashes of laughter. Self-deprecation builds with comic force as he mocks his late starts in life.

While Hoffman says his "mode of ironic melancholia" is in a "vein of English eccentrics, and entirely consistent with his personality", for Robinson, Sebald is "not so much melancholic as burdened by history: the wryness, the sardonic humour, is how he engages with experience he'd otherwise find too painful to contemplate". Byatt, for whom Sebald's narrator "journeys in great circling spirals in order not to go home, to get away from his origins", sees melancholy as a "cover for something more savage: he suddenly puts the knife in about the Germans".

Sebald, who relaxes by "walking and taking the dog out", travels alone: "You can't see anything as a pair; you have to be by yourself." He is clearly burdened by his writing. "You have no conception when you begin; it seems like an innocent occupation, but it's not easy. You become a boring person for those around you. It must be extremely uncomfortable to live with a writer - all that preoccupation and brooding." He revises both his English and French translations, scans his Italian ones, and has "intervened massively" in the past ("I literally rewrote them"). He is also oppressed by growing fame. "The phone calls and letters could drive you out of writing. I'm on the brink of saying, no more readings. At the same time, one doesn't want to be too capricious."

His celebrity in Germany spread beyond literary circles with the non-fiction Air War And Literature (1999), which will be published in Britain next year. It attempted to broach what he sees as a "muteness" in Germany about the Allied firebombing of German cities in the final stages of the war. "We didn't want to be reminded partly because of the shame," he says. "The country was reduced to rubble, and people were scavengers in the ruins - the same people who were 'sanitising' Europe were all of a sudden among the rats." There is still resentment that it remains a taboo, says Sebald, "but we should know where it came from: we bombed Warsaw and Stalingrad before the US came to bomb us. When Dresden was bombed and there were countless corpses, special commanders were brought in from Treblinka because they knew how to burn bodies."

Amid TV debates spawned by the book, "it was very disagreeable to get 100 letters every day at breakfast," he recalls. "Nobody had had an outlet for these feelings before. Some wrote hysterically about their experiences. It took the lid off. Others said the bombing had been masterminded by Jews abroad. There's a danger of getting applause from the wrong side."

Sebald prefers his British readers to his German ones: "I get very odd letters from my native country, horrified that there aren't any paragraphs in Austerlitz, or taking me up on errors of fact. It's an attitude problem, an inability to put yourself into the place of another person. There's definitely something like a national character, even though it's frowned upon to say so." He thinks ambivalence about the "official culture of memory" remains widespread, and suggests his books make a splash but then sink with little trace. "After that, there's silence. It's an indication of resentment, that somebody is making you think about all that again. People are saying, 'it's enough - it's time to think about ourselves'."

Although his claims for the act of writing are so tentative, so doubt-ridden, Sebald feels writers have an obligation to air what others cannot bear to remember. Writing may even be a minute step towards expiation. "It would be presumptuous to say writing a book would be a sufficient gesture," he reflects. "But if people were more preoccupied with the past, maybe the events that overwhelm us would be fewer." At least, he adds, "while you're sitting still in your own room, you don't do anyone any harm".