Do Blur have a future? Are Gorillaz gone for good? Is his feud with Noel Gallagher really over? The heroin issue… Damon Albarn answers some tricky questions

You get a good view from the top floor of Damon Albarn's west London studio: the uneven sprawl extending out towards Kensal Green and Wormwood Scrubs. The first thing you notice, though, is the huge elevated road celebrated by Albarn's band Blur, whose single For Tomorrow crystallised the queasy alienation of London living as a matter of being "lost on the Westway".

Soon enough, Albarn tells me, what we can see is set to be transformed by a 32-storey development. He is not best pleased, and his pain has been poured into a new song he plays me just before I go home, full of references to "men in yellow hats" and a world "where the money always comes first".

This is Under The Westway, premiered by Albarn and Blur's guitarist Graham Coxon at a charity concert in February, now recorded by the group as a one-off single and set to feature in the huge show they will play in Hyde Park on 12 August, as part of the closing festivities for the Olympics. "We recorded it live," he says. "One take. It's the first Blur song where it's been one take, because previously I never finished the lyrics before we recorded. This time, I'd done that, so we were actually able to perform it."

A tentative smile. "Which is quite nice, because I don't really see any more recordings after this. So it's nice to have finally done one song where we did it properly."

This is big news. Having seemingly been laid to rest in 2003, Blur got back together five years later. In 2009, they played at Glastonbury, Hyde Park, the Oxegen Festival in Ireland and the Scots festival T In The Park. It looked as if that was probably that, but ever since, some people's hopes that Blur might make a new album and return to the touring circuit have been regularly tickled – by news of rehearsals and recording sessions, a stand-alone single titled Fool's Day (2010), and of late, their performance at the Brit Awards and the announcement the Hyde Park gig. In what remains of the music press, the four of them are regularly exhorted just to get on with it and decisively reunite.

Blur in 1991. Photograph: Geoffrey Swaine/Rex Features

This is what the popular culture of the early 21st century is like. Happy Mondays and the Stone Roses are both back together. Pulp reunited last year; Blur's old adversaries Suede were also on the road. This summer, you can once again see Queen without Freddie Mercury.

Albarn, though, is going against the grain – and what he's talking about sounds like a full stop, certainly as far as new music is concerned. "I believe so," he says. "I believe so. I find it very easy to record with Graham. He's a daily musician. With the other two, it's harder for them to reconnect. You know what I mean? It's fine when we play live – it's really magical still – but actually recording new stuff, and swapping musical influences… it's quite difficult."

So no more Blur records?

"No, I don't think so."

And will you play live again after Hyde Park?

"No, not really."

This is even bigger news. So that's it?

"I think so, yeah," he says. A little later, he goes on: "And I hope that's the truth: that that's how we end it. I don't know: you can write scripts, and they always end up going… [pause]… well, one thing I've learned, and I'm sure you're exactly the same, is that everything I think I've got totally sorted out, and I know exactly what's going to happen – it never works out that way…"

So how should I put it? That in all likelihood, this is the end of Blur?

"In all likelihood, I would say. [pause] Oh, God…"

I meet Albarn at 10 o'clock on a Thursday morning, the day before he turns 44. Whenever possible, he keeps office-ish hours at his west London base ("10 till 5 or 5.30, five days a week – all school holidays off"), which partly explains a work rate that makes most musicians look like sloths. A self-titled album by Rocket Juice And The Moon has just been released: the work of Albarn, the renowned Nigerian drummer Tony Allen, Michael "Flea" Balzary of Red Hot Chili Peppers and a diverse supporting cast. In the role of producer, Albarn has just finished a record by the soul icon Bobby Womack. He is also starting a new solo album. Yet he does not have the appearance of a man burdened by work: he explains all this while sporadically tugging on an early-morning joint.

Before I set off to meet him, I spend an afternoon going through 1990s music magazines. Tucked into a copy of Select from 1998, I find a photocopied handbill for a production of Jacques Offenbach's operetta Orpheus In The Underworld, staged at Stanway Comprehensive in Colchester in the early 1980s. The cast list features Albarn as "Jupiter (King of the Gods)", while Coxon is a bit further down, playing "Styx (servant of Pluto)".

"How have you got that?" he marvels. He says he must have been 12 or 13 at the time.

As school productions go, it looks quite high end. "You should have seen it. It wasn't that high end. But we were incredibly lucky: we had a fantastic music teacher, Mr Hildreth. We did Orpheus, Oh! What A Lovely War – fantastic. We did The Boy Friend – not so fantastic. We did Guys & Dolls – incredible. And we did a bit of West Side Story as well. A really nice cross section."

And do you recall what playing Jupiter actually involved? "A lot of cotton wool for a beard. And a piece of lightning made from BacoFoil and card."

The memories chime with another of Albarn's summer commitments: a second staging of Dr Dee, the opera that premiered at last year's Manchester International Festival and is now set to arrive at the English National Opera in London in late June, as part of the cultural Olympiad. Its subject is John Dee, the mathematician, alchemist and confidante of Elizabeth I, and it's less a straightforward story than an evocation of a very English mysticism that Albarn's songs project on to the country of today. His intention, he says, is to "sing about the past, but feel it in the present".

Albarn suspects that at least some of the production's hosts remain sceptical. "I know for a fact that there are some high up people at the English National Opera who are not particularly amused by my presence this summer," he says. "But, you know, I promise to clean up and shut the door at the end. I won't leave any mess."

What's fascinating about the production is that, for all its musical exotica and historical subject matter, Dr Dee has qualities that run through just about all the music Albarn has created since the late 1990s, whether with Blur, his hugely successful pop project Gorillaz, the short-lived quartet The Good, The Bad And The Queen, or in collaboration with the Chinese musicians who worked on the music for the jaw-dropping musical production Monkey: Journey To The West. All exude a craving for the sublime, and the abiding impression that the essence of what Albarn wants to convey is best captured by music, rather than mere words. This is hard stuff to explain, but he comes close when he says this: "I write emotionally. That's the only way I can do it."

And therein lies a tale. In the past, Albarn has talked about a point in the late 1990s where he broke through "the barrier of self-consciousness" and "never really looked back". And I wonder: what triggered it?

He mentions 13, the fuzzy, experimental, Blur album put out in 1999, and written in the aftermath of his split with Justine Frischmann, the one-time leader of Elastica, a band whose brilliance was almost completely snuffed out by heroin. He then goes quiet. "Well… a lot of things triggered it. I can't talk about this area, really. It's not really…"

He gets up, goes to the window, and distractedly looks at the view. "How does one talk about one's journey through life? It becomes a very different thing, doesn't it?"

Five minutes later, we're sitting on the balcony, talking about 13, whose second half is among the most underrated swathes of music in his career. And I ask him again: what happened?

"Oh God. Well, what do you think happened? Be honest."

Albarn has been asked about this before: in No Distance Left To Run, the documentary released after Blur's reunion in 2009, he talks very cagily about this period – when Britpop's garish colour scheme was replaced by much darker shades – and offers nothing more specific than the observation that "a lot of people's lives were fairly muddied by heroin". So, I give him my interpretation of what changed his approach to music: that he had an experience common to a lot of musicians from bohemian backgrounds. For all its grave dangers, that drug – perhaps in moderation, if such a thing is possible – sometimes opens up a side of them that they didn't know existed.

"That's an astute observation on your part," he says, "and I wouldn't disagree with it." For some reason, he then shakes my hand.

What's long struck me, I tell him, is that he wasn't exactly subtle about it. "I'm never subtle!" he laughs. In 1997, Blur released Beetlebum, the single that seemed to capture smack's soporific, ethereal effects, and ended with a refrain of "He's on/He's on/He's on it". On 13 there was a song titled Caramel, seemingly referring to the brown goo produced when heroin is heated up, and Trimm Trabb, a picture of sedated solitude in which Albarn sings, "I doze, doze away." But even though Frischmann's drug problems were becoming well known, nobody who wrote about Blur – myself included – seemed to cotton on (much like, perhaps, when Britain averted its eyes from the fact that YMCA by the Village People was a joyous hymn to the gay lifestyle).

"I thought everyone did," he says with a groan. "I thought everyone was just being really nice, and not making too much of a deal of it. Cos, you know, although I totally agree with your astute observation, the reality of any experimentation is that it can become habitual, and it can take over your life… [pause] I would never, ever disagree with the enlightening abilities of drugs, I also… you know… respect their potency. You have to have very good intentions, otherwise… even the best intentions in the world can go awry."

And did they with you?

"I think inevitably, they do with anybody who… you know… has that innate, spiritual kind of yearning."

In other words, nobody manages to do heroin on their terms.

"There's no such thing as our terms. There are only universal terms that we all have to abide by. And live with."

Interestingly, during the time we're talking about, heroin sent a lot of musicians into torpor and silence, as they hid behind their curtains. At the very least, a lot of them slowed down. But Albarn didn't. "No. I've always got up in the morning, excited about making music. I genuinely feel lucky in that sense."

He regains his coherence. "It wasn't just that that changed me profoundly. It was going to Africa. That was a rehabilitation, in a sense, from that previous experience. And the opposite: it was all about clarity: freedom through clarity. An amazing, beautiful, humbling experience."

Albarn's partner, and the mother of his daughter Missy, is the artist Suzi Winstanley, who works in collaboration with Olly Williams: their working lives are centred on expeditions to remote parts of the world, where they produce paintings of both wild animals and the landscapes in which they live. She and Albarn became a couple circa 1998, and she gave him one particular idea that would quickly change his life: "She'd been travelling in Africa for 10 years previously. Going there was something I'd always wanted to do, but she inspired me to do it." In 2000, he went on an Oxfam trip to Mali and was profoundly affected by just about everything he experienced.

"It was just a really inspiring, colourful, bright, gorgeous place, you know? Apart from the music, which really is like a river that flows through Bamako [Mali's capital], I think the recycling market was the thing that stayed with me. It's just so huge…" He points to the top of a nearby street, and then indicates an area of around a square half-mile, at least. "You have women and children essentially, in temperatures up to 100 degrees, on the rubbish, picking out anything that has some use… they take the plastic and metal and rubber, and that's given to cleaners and renderers and preparers, and then down to where the road is, where there are ploughs, and rockets, and computers, all for sale.

"It's shocking in the sense that you think, 'This is really hard work.' But it's very practical. And extremely honest, and very productive. And if you could translate that humility, and ingenuity – well, there are lessons for all of us."

He has been going back ever since: Mali Music, an album made with some of the country's most notable musicians, was released in 2002, and African influences in Albarn's music remain a constant: the aforementioned Tony Allen was a member of the The Good, The Bad And The Queen, and is at the heart of Rocket Juice And The Moon (whose album also features the Ghanian rapper M.anifest), as well as being involved in Dr Dee; the same production's cast of musicians includes Madou Diabate, a virtuoso player of a Malian instrument called the kora.

Albarn's first visit to Mali capped a run of apparent epiphanies that had started with a visit to Iceland in 1996, and another "cleansing". "I used to have a recurring dream, as a child, of a black sand beach. And one hazy, lazy day [laughs], I was watching the TV and I saw a programme about Iceland, and they had black beaches. So I got on a plane, and booked into the Saga hotel. I didn't know it meant Saga holidays, for older people – I thought it was Saga as in Nordic sagas. But it was actually an OAP cruise hotel. I was on my own: I didn't know anybody. I went into the street, Laugavegur, where the bars are, and that was it."

Albarn with Gorillaz co-founder Jamie Hewlett. Did they fall out? 'Erm… well, that sounds very juvenile, doesn’t it? But being juvenile about it, it happens.' Photograph: Greg Williams

What is it like since its catastrophic banking crisis? "Icelanders are a bit more durable. They're true existentialists. They really understand their environment and why they are all connected to it. I think it's to do with having lots of space."

Albarn was last there on New Year's Eve, when just before an early-morning drive back to the airport, he saw "the best Northern Lights I've ever seen… this blue, green, illumination, just flying across the whole of the sky".

So: Iceland, his drug-assisted artistic breakthrough, two months in Jamaica in 1999 ("An absolutely wonderful time," he later said. "I really felt like I'd escaped the darkness") – and, let us not forget, the birth of his daughter not long before. "All powerful experiences," he agrees. "And having a child, the most powerful of all of them."

Among the first products of Albarn's rebirth was Gorillaz, the project fronted by four cartoon characters and created in collaboration with Jamie Hewlett, the artist with whom he shared a house in between the end of his relationship with Frischmann and the decisive start of his life with Winstanley. To date, four albums, smattered with such wildly diverse guests as Shaun Ryder and Lou Reed, have been released under that name, and brought Albarn success often even greater than he enjoyed with Blur: certainly, Gorillaz has taken him much closer to the American mainstream than his first band ever managed.

"Gorillaz was a really wonderful, spontaneous thing," he says. "It started with two people sitting on a sofa, going, 'Let's make a band.'

'All right, I'll go into my studio and draw some characters.'

'I'll go in mine and make a tune, and we'll put them together.'"

Which brings us to another of today's revelations. Will there be more Gorillaz music?

"Er… unlikely."

Really?

"Yeah."

That's a shame. Do you feel you're done?

"Jamie does, which is fair enough. I think we were at cross purposes somewhat on that last record, which is a shame. So until a time comes when that knot has been untied…"

The project's demise, he says, is a "long story", which seems to have reached a head in 2010, when Gorillaz toured as a huge band, and Hewlett's visuals were not nearly as central to the show as they had been. "It was one of those things," Albarn says. "The music and the videos weren't working as well together, but I felt we'd made a really good record, and I was into it. So we went and played it."

So are you and Hewlett talking? Did you fall out?

"Erm… well, that sounds very juvenile, doesn't it? But being juvenile about it, it happens. It's a shame."

By contrast, one very unlikely friendship has recently been cemented. Seventeen long years ago, in the wake of their famed 1995 fight over the number one position in the singles chart, Blur's rivalry with Oasis turned poisonous and was reflected in a particularly nasty standoff between Albarn and Noel Gallagher. It was stoked by the class differences between them, and gleefully talked up by the press. But earlier this year, they had a chance encounter, began to get on – and marked their joint attendance at the Brit awards by posing for the cameras, locked in a stagey embrace.

"I met him in Mayfair, in a nightclub. What normally happened in that situation was, we had a way of looking a certain way and walking past. It was like a code. But we broke the code that night, instantly. We looked at each other and said hello, and it made all the difference. A lovely man."

A man who, in 1995, said he hoped Albarn would "catch Aids and die".

He shrugs. "I know. There you go. I like his sense of humour. I like people I can be daft with."

Part of their rapprochement, he acknowledges, is that back in the frenzied era of Britpop, they had similar experiences at the exact same time. Coincidentally, they will soon have something else in common: an artistic life without the band that made their name. Which brings me to the last question: with Blur and Gorillaz gone, how will Albarn feel, setting out on a future with neither of his most famous brand names to help him?

"I'm just doing what I always do. It's a bit daunting sometimes, but it's important to keep challenging yourself. Maybe that's really old-fashioned." He thinks for minute. "I'm not old-fashioned, though. I'm…" He gropes for the right word, and then gives up, evidently itching to get back downstairs to work on some music. Below, the men in yellow hats are hard at work, getting ready to blot out the view for ever.

• Dr Dee is released on 7 May on Parlophone Records.

• This article was amended on 13 April to remove a statement that Albarn had registered a planning objection to a 34-storey student hall of residence.