THE LAST time I saw Hanif Kureishi was at a reading by the author JT Leroy. It was a peculiar event, at which Leroy - a teenage rent boy turned author - was supported by a cast of celebrities: Marianne Faithfull was there, and Samantha Morton, and Beth Orton. Kureishi was in the audience because he had spent an afternoon in Leroy's company, at the house of a Freud (Bella), along with Nick Cave and others, and when I cornered him to express misgivings about the peculiar cult which surrounded the truckstop prostitute, he was unequivocal. The writing was the thing, he said, calling it "a mixture of lowlife and very erudite reading". Which was lucky, because, not long after that, Leroy was exposed as a fraud. He was not a teenage tearaway, but a middle-aged woman, and the character in the Warhol wig who performed at readings was revealed to be her sister.

Kureishi declares the whole Leroy business "hilarious" when I remind him of it, and it's a word he is fond of. Some of the things he finds hilarious are funnier than others. Also a matter of hilarity are the convulsions of the British state over the war on terror, and the Daily Mail, which he also describes as "the Mein Kampf of the newspaper world". With faultless timing, on the day I meet Kureishi at his agent's west London office, the Mail has the splash headline: "SOFT TOUCH UK: Obsession with multiculturalism makes Britain a terror target, says shock report."

"It's hilarious," he says. "Isn't that brilliant? I want to cut that out and study it."

Kureishi has every right to be buoyant. His new book, Something To Tell You, is an epic tale in which the consistent themes of the author's life - love, sex, politics, multiculturalism, the whole soft touch - are played out in a story that stretches from the Grunwick dispute of 1976, when the Asian workforce of the Grunwick film processing lab protested over pay and conditions, through the Thatcher years, to the moral flabbiness of the Blair-Bush project.

It's a confident novel, blurring fiction, autobiography and recent history, with little explosions of dissent: Kureishi notes how the traditional Indian restaurants are designed to reproduce colonialism for the British masses, while also satirising the "trashy media class" of which he is at least a part-time member. Looking back on more radical times, his narrator observes: "These were the days before the working class were consigned to be consumerist trash in cheap clothes with writing on them, when they still retained the dignity of doing essential but unpleasant work."

You might call it a novel born out of a mid-life crisis, if people hadn't been saying that about Kureishi's work for a decade. But he doesn't disagree with the suggestion. He is 53, and turning 50 made its mark on him. The book is his attempt to consider the past half-century, "which is really the history of immigration, and cultural change, and people like my father getting off the boat and coming in to England. And here we are 50 years later arguing about whether they should have Sharia law in Dorset. How could you not be fascinated by that?

"It's not only a crisis for me but a crisis for the country, ie, what sort of Britain is it? What's the identity of Britain? It's the mid-life crisis of our country."

Kureishi isn't quite in JT Leroy's class when it comes to biographical reinvention, but he has always mixed erudition with a fascination for low-life. Looking at him now - cropped grey hair, deep indigo jeans, Al Capone brogues - you might not connect him with the taboo-stretching rebel who remoulded his own experience into The Buddha Of Suburbia, but the pop sociology of Something To Tell You is welcome after a period of painful - some would say exploitative - introspection. There is also a sense that the culture has shifted and that Kureishi's voice has recovered its vitality. Or maybe we are just ready to hear what he has been saying all along.

Kureishi was one of the first writers to identify the dangers posed by Islamism in his 1995 novel The Black Album, and his 1997 film, My Son The Fanatic. But he understands the appeal of Muslim extremism. "Radical Islam was a movement of liberation. It really came out of colonialism. My father identified with the Muslim League, because this was a way of keeping the Brits out of India, and an identification with other Muslims, who would then create their own state, which became Pakistan.

"In Iran the Muslims and the clerics were radicals against the Shah and the United States. So it began as a movement of liberation, and has now become, like many liberation movements, a form of fascism."

The appeal of Islamism to British-born Muslims is, he says, a by-product of racism. "You live in a country where people consider you to be Paki scum, the idea then that you get some power by identifying with your Muslim brothers is very important. But to be honest, most Muslims are not radical. Most Muslims want exactly the same things that you and I want. They don't want to live under a cleric. They want to go to school and they want hospitals. There's a lot of fantasising going on about what Muslims are, and that's where the racism comes in."

Fond as he is of irony and ambiguity, Kureishi is an unequivocal supporter of multiculturalism. "It's the idea that people are allowed to do whatever they want, be whatever they want, say whatever they want, have whatever culture they want. As long as they don't become violent and impose themselves on other people, it's a fantastic idea.

"And now we've really gone backwards. I heard somebody on the radio saying: They don't integrate'. Well, the f***ing royal family doesn't integrate. Rich people don't integrate. Why is it only the Muslims who are not integrating?

"I think racism's coming back under that code. I mean, the Muslims' PR hasn't been great. They haven't done themselves many favours. But we live in a country where people are allowed to do exactly what they want, as long as they don't break the law. That seems to me to be fair."

While he was writing Something To Tell You, Kureishi also completed My Ear At His Heart, a memoir about his relationship with his late father, who came to England from Pakistan in 1947 to study law, later marrying an Englishwoman (Hanif's mother) and becoming a civil servant in the Pakistani Embassy in London. The book was Kureishi's attempt to understand the tensions in the father-son relationship, and their "violent oedipal arguments". His sister Yasmin objected to what she saw as a Stalinist reworking of family history, calling it "hyped-up twaddle", but it wasn't a book which displayed the author in a particularly gorgeous light. Kureishi, who admits the 1970s and 1980s saw him "incapacitated by symptoms, phobias, fears" and a sense of futility and self-absorption, wrote that the death of his father in 1991 prompted him to embark on hedonistic spree of "cocaine, amyl nitrate, Ecstasy, alcohol, grass". It was, he wrote, "as though I were trying to kill something, or bring something in myself to life".

"After 40, you begin to see your parents as real people in the world as opposed to these huge monsters who dominate your life," he says now. "As you move back you begin to see their lives, their history. Also when you have children yourself, you get some sense of what it must have been like for them. It's as though your whole life is coming to terms with your parents. Slowly. Which means withdrawing, shrinking them, and getting them into a good size. But when I look back, I chose my parents wisely. I was loved by them, if not adored by them, they treated me very well."

The rivalry stemmed from the fact that Kureishi Sr was an unpublished author. "When I became successful, it hurt him. It made it very tricky for me, because here was a boy who was hurting his father for no reason at all."

His accommodation with his father now allows him to acknowledge that he inherited much of his character. "The things that I love now about the world, he taught me, which are to do with literature, to do with music, to do with dissent, to do with hating radical Islam, authority. All of that I got from my father, who grew up during the period of British rule in India. My father was the underdog then, too. He hated the English. So growing up with that sort of dissenting spirit is something I'm grateful for. And a love of literature."

When I ask about Kureishi's mother, his voice takes on a faraway tone, as if he is trying to remember the contents of a lost shopping list, which is odd, as his mother is still alive. "My mum used to take me to the library. My mother had been an artist. My mother was rather intelligent. My mother was rather depressed because she was a housewife. My mother was the generation just before the feminists. So my mum was at home doing the washing with her hands, lighting the fires, doing all the mother stuff.

"My mum was rather repressed, but she was also very brave, because she married a Pakistani, a brown man. She was very shocked - it didn't occur to her that people would shout Paki-lover' at her in the street. There was a lot of casual everyday racism. I remember the neighbours saying, if it was a warm day: You Indians like the warm, don't you?' Stuff like that all the time."

IN The Buddha Of Suburbia, Kureishi mined fiction from his upbringing in Bromley, Kent, and the new novel represents a return to that territory from the perspective of middle age. His attitude to the suburbs could politely be described as mixed. "These are decent working people with their families, outside London. They're drones - they work, and they kept the empire running. That's where my father ended up. It's a dull place. But nobody was unemployed there.

"There is a hatred of culture too, in the suburbs. They hated it if you thought you were posh. If you got above yourself. If you said you liked Beethoven they'd think you were an absolute arse. There was a real dumbing-down of cultural potential. If you said you liked poetry you might as well say you were gay. There is a sort of philistinism there."

South London also had its racist tensions. The National Front marches through Peckham and Catford informed My Beautiful Laundrette, and were early signs of Britain's struggle to cope with the consequences of post-colonialism and economic migration.

"It wasn't until the 1980s that multiculturalism, as opposed to multi-racialism, started. My Beautiful Laundrette was 1984. Before that, I'd go to TV companies and they'd say: Well, you're a decent writer, why do you want to have all these Asians in your stuff?' They thought because you were writing about Asians that the only people who would watch it would be other Asians. The TV companies then began to have ethnic departments, which I refused to go in.

"I said: I'm not going in the ethnic door, it's like apartheid to me. I'm staying in the white department, f*** you. I'm not going in that door with the Pakis.'"

The publication of Salman Rushdie's Midnight's Children in 1981 was a turning point: "One of our blokes had done it. Salman Rushdie was living in Britain, he was a British-Asian writer. That was a big moment."

It was also a symbol of the change in the culture, which lies at the root of the current arguments about multiculturalism. Kureishi seems torn between optimism and pessimism, though he probably errs towards the latter. A recent visit to Germany, in which he was frequently referred to as an immigrant, left him depressed about European attitudes to race, and he predicts that the continent will become a fortress. "They're going to build a wall around Europe, to keep the Africans and the Turks out. It'll become this PC place surrounded by barbarians. That seems to be the ruling idea at the moment.

"Everyone's going on about global warming and emissions at the same time that the West is creating huge devastation in Iraq. They're worrying about separating their plastics from their tin cans, and they've absolutely destroyed this country. And Afghanistan. And they talk about pollution. It's a joke."

He is similarly amused by the musings of the archbishop of Canterbury on, as he puts it, "the introduction of Sharia law in Dorset". "I thought he was meant to be Christian. You'd think he'd be recommending more Jesus things, wouldn't you? It's very, very funny."

On the optimistic side, he seems contented with his own life, particularly when talking about his children. He has three sons: 14-year-old twins, Sachin and Carlo, by his former partner, Tracey Scoffield, and a younger son, Kier, with his wife, Monique Proudlove. Kureishi's appropriation of the break-up of the first relationship in his book Intimacy was not appreciated at the time, but diplomacy seems to have prevailed, and he lives near the twins in Shepherd's Bush.

"They're very good company," he says. "They haven't started drinking or smoking. They haven't moved into the decadent years. They're in the f*** off' years. F*** off. Just f*** off.' There's a lot of that. But they haven't become self-destructive yet."

And with the wisdom of middle age, how does Kureishi regard his own flirtation with self-destruction? "I'm still in the hedonism years," he says, laughing. "I hope."

Is it still fun?

"It doesn't save your life, which is what I used to believe. It's as though I believed that finding a drug, or finding a woman, would suddenly make everything all right about my life and about the world. I had a lot of hope in terms of decadence: that I could disappear into this abyss of pleasure, that I wouldn't have to worry, I wouldn't have the anxiety of a normal person.

"I know that if I get pissed tonight I'm going to feel awful tomorrow. I know that perfectly well, so I'll make a decision not to. And that's both mature and dumb."

The writer's mid-life crisis seems to be under control. The country's may take longer.

Something To Tell You is published by Faber on March 6. Hanif Kureishi appears at the Aye Write festival, Glasgow, on March 7 www.ayewrite.com