Speaking to Tom Paley is like opening a door onto the history of American folk music.

Although he was born in New York City and has lived in Europe for 50 years, he is a font of wisdom on America's rural traditions and a key player in the music's popular development.

In the 1950s Paley befriended blues singer Leadbelly, as well as becoming a sometime duo partner of Woody Guthrie. A founder member of the influential New Lost City Ramblers, he became a source of songs for Bob Dylan, who acknowledged Paley on his World Gone Wrong album, and a hero to the Grateful Dead and Ry Cooder.

Paley became interested in folk music first through attending concerts in upstate New York with his parents, who were left-leaning politically and had a summer shack in a community of leftist sympathisers. "The people there would raise funds for the loyalists in Spain or the Chinese who were facing the Japanese threat and I suppose I became a bit of an idealist," he says. " I began listening to Paul Robeson and songs that spoke out about the labour unions being crushed. I was never much interested in pop music and this was something real that I was in sympathy with."

Later, having picked up on country music through hearing the Carter Family, Uncle Dave Macon and the Blue Sky Boys on the radio, he joined the AYD (American Youth for Democracy) and attended their square dances, enjoying the fiddle music especially. He bought a guitar from a pawn shop, taught himself to play and then a few months later, learned to play banjo. A friend, Victor Traibush, meanwhile, had discovered where Woody Guthrie lived, knocked on his door, introduced himself as a fan, and began visiting Guthrie regularly – a routine he and Paley repeated with Leadbelly. Paley went along with him one day and wound up accompanying Guthrie on gigs, although Guthrie's unreliable streak meant Paley was sometimes left to entertain the audience by himself.

At Yale University Paley ran hootenannies that were attended by Peggy Seeger and her brother Mike. Then when Paley moved on to teach in Maryland, he and John Cohen were invited onto a radio show. Mike Seeger happened to be nearby, the trio quickly worked up a few songs, did the broadcast and felt they were on to something. They were right. They went on to create a huge revival of interest in string band music, their next stops being Carnegie Hall and Folkways Records.

Paley continued with the Old Reliable String Band but after his father was roughed up for defending an anti-Vietnam War demonstration, in 1963 Paley and his wife, Claudia, a writer and singer, left for Sweden. From there they made several trips to London and played around the UK, with Paley going on to record an LP for Topic with Peggy Seeger. They settled in London in 1965 but divorced shortly after their son, Ben, was born.

This didn't prevent a father-son bond developing and when Ben took up the violin, aged eight, the 47-year-old Tom followed suit. Ben and Tom would go on to play together but before that, Tom formed the New Deal String Band, with, at first, Scottish fiddler Bobby Campbell, and carved a reputation for the group throughout England, Scandinavia and America.

Far from beginning to take things easy as he enters his 86thh year, the interest generated by his group, Tom Paley's Old-Time Moonshine Revue's most recent album, Roll On, Roll On, has meant that he's in greater demand than ever.

"The love of the music keeps me going," says Paley, who has three concerts in Scotland arranged around his appearance at Fife Traditional Singing Festival this weekend. "I'm still learning new material. It's funny: all these years after I got interested in folk music because the pop music of the day felt phoney, people much the same age as I was are doing much the same thing for much the same reason. They want something real that they can relate to."

Tom Paley plays Green Hotel, Kinross tomorrow; Pleasance Cabaret Bar, Edinburgh on Friday May 17; and Milngavie Folk Club on Saturday May 18.