Sheer terror, Jamie Chambers calls it.

It's 2010. The musician and filmmaker is 26 years old and en route to a recording studio in London to collaborate with one of his early musical heroes. "I was walking down the street in Shoreditch and this figure appeared about 100 metres away and even at that distance he's unmistakable," Chambers recalls, smiling. "It was absolutely terrifying. I remember being flummoxed. He made me a cup of tea and I couldn't believe Jarvis Cocker was making me a cup of tea."

He got over his nerves, though, and headed back to Edinburgh with another piece of the puzzle in the bag. There would be hundreds, thousands more pieces to gather before he and his cohorts in Edinburgh arts collective Transgressive North were done. By that point they had already harvested the results of three years' work, so you could say they were into their stride.

The puzzle will be solved in the shape of a monumentally ambitious tripartite release entitled Everything Is New, comprising an original album by Chambers' group Marram called Sun Choir, a 29-track compilation album called BOATS featuring a roster of contemporary musicians that would be the envy of many a commercial label (Four Tet, Rustie and Deerhoof among them) and a dreamily poignant film narrated by Irvine Welsh. Album sales proceeds will go to Scottish Love In Action (SLA), an Edinburgh charity of which more later, while a DVD of the film is bundled with CD copies of Sun Choir.

The liner notes to Sun Choir blithely summarise the madness behind the method better than anyone: "A totally irrational, ever-expanding monster running entirely on goodwill and blind dedication, the Everything Is New project has broken backs, broken friendships and broken every estimation we originally had for it."

Everything Is New took six years from conception to reality. When it began, Chambers was just out of university. He's now 29. "It's crazy. Since the project began I've started and completed a Masters [in film], I've got married, I've moved city several times." Back in his native Edinburgh with wife Sammy, Chambers is doing a PhD in film at London Film School and Exeter University, though he seems fulfilled evangelising about the kaleidoscopic nature of Everything Is New.

The project sprang from a visit Chambers' sister Jenny paid to the Light Of Love children's home in Tuni, a large town in Andhra Pradesh on the east coast of India. Funded by SLA, the home cares for, clothes, feeds, educates and provides medical care to 500 destitute children. Jenny Chambers returned with such positivity about the work being done in Tuni that SLA and Transgressive North, of which she is a member, hooked up.

For Jenny's brother, it was the notion that under the caste system some children were Dalits, or untouchables - despite the status being illegal from 1947 - that made he and Transgressive North want to engage the children in artistic endeavours. "I was very compelled by the idea that some kids might feel or be told that they were less valuable than other kids," he explains, "and the whole project was effectively built around that and the hope we could in some small way counter that for them."

Certain they wanted to collaborate with the children, Transgressive North then had to decide how best to do so. "The kids love listening to music, they love dancing to music, they love watching films," says Chambers, "and our network of contacts and the artists within Transgressive North all have connections to those two mediums." And lo, Everything Is New was born.

With their hearts set on making a film and an album, the collective sought contributions from Scottish writers and poets, among them Welsh, Alexander McCall Smith and Valerie Gillies. Chambers and Marram then began to compose the music for Sun Choir, with the idea that the children from the Light Of Love home would feature heavily.

After the first visit to Tuni, Chambers realised he'd come home with insufficient material. The collective's resources dwindling, he returned to India alone with two microphones and a laptop with music software. "I ended up spending the best part of two months out there - just me, recording with the kids, pretty much every day."

It was at this point that the seeds of BOATS were sown. "I recorded the kids singing every note in their range to all the different assonances, so 'yeah' to 'aah' to 'ooh'," says Chambers, "so when the songs developed, if we wanted to include the kids in a different way we could.

"Which meant I built up a large bank of samples that were flexible." The American duo High Places were the first to accept the task of reworking these samples, and then "we thought: why not invite all our favourite artists we can find an email address for?".

The double CD is as varied and invigorating a compilation as you're likely to hear, veering from the heartbreaking (Four Tet's Gillie Amma, I Love You) to the rousing (Boatsss by Rustie, a track "the kids went insane for"). "It's almost like a concept album with the kids' voices as the concept," suggests Chambers.

If that sounds challenging, it was a walk in the park compared to Sun Choir. "There must be 300, sometimes more than 400 instruments on one track," says Chambers. "We went round the best part of 40 primary schools in Edinburgh getting children to sing - we loved the idea of children in Edinburgh singing to children in Tuni - so there are over a thousand Edinburgh schoolchildren singing on Sun Choir." Such unthinkable numbers meant distilling the music was not straightforward. "We didn't compromise on the mixing - we mixed Sun Choir for about a year and a half, pretty much three days a week."

The Everything Is New project is an exercise of determination. "We wanted this to be a huge statement to the kids about how valuable they were," Chambers says, "about their importance and their beauty, and we didn't want to compromise on any part of that as a result." Job done.

Sun Choir by Marram and BOATS are released on Transgressive North on January 20. Visit www.everythingisnewproject.com.