JOHN Banville is masterfully at home with his subject no matter the time or place he chooses in which to set his novels: the 16th century holy Roman empire (most recently in Prague Nights); 1950s Dublin in the brilliant Quirke novels; and Los Angeles in the same period (The Black-Eyed Blonde, in homage to Raymond Chandler). In each, he writes using the nom de plume for his crime fiction, Benjamin Black, but, in Mrs Osmond, his latest novel, Banville is back, and in stunning form.

He has returned to the past, 1880s England and continental Europe, to pick up where Henry James left off at the end of his long novel, The Portrait Of A Lady. James’s book ends with his wronged heroine, Isabel Osmond, not knowing where to turn after the funeral of her beloved cousin Ralph Touchett and having been wantonly deceived by her husband, Gilbert, and his former mistress, Madame Merle, mother of his daughter Pansy.

“But”, James wrote, “she [Isabel] knew now. There was a very straight path”. When The Portrait Of A Lady was published in 1881 many readers expected a sequel but none was forthcoming. Banville, who has recognised James as his main influence, picks up the trail as Isabel sets off on her journey to emancipation and self-knowledge. An American, she had come to Europe “to see the world before us burst into unearthly radiance” but had been brought low by Gilbert and Madame Merle, who spun a web to entrap her in marriage to the widowed Gilbert after learning that Isabel had been left a small fortune at the instigation of the terminally ill Ralph.

Banville has acknowledged that Mrs Osmond is written in a Jamesian style but it is far from reverential (how could it be, coming from the pen of a Man Booker Prize-winning author of Banville’s stature?). There is at least one lesbian in Banville’s novel (which would not have been countenanced in James’s time) and there is a vegan lunch (punctuated by “herbivoral crunchings”) over which the suffragette Florence Janeway talks passionately about female emancipation. Isabel has withdrawn a large amount of money from her London bank without telling her husband. But she informs Miss Janeway: “I mean to purchase my emancipation – my suffrage, if you like!” But the means by which she will do this are not of a base transactionary sort. Isabel is above that. She is “tediously virtuous” and has an “inflexible” sense of duty that can be an obstacle to her desire for freedom.

One of the many memorable aspects of Mrs Osmond is the way Banville deploys Jamesian interior monologues to explore, in coruscating language, such themes as independence and obligation. Style was everything to James and, with Banville, metaphors soar, similes dazzle and dialogue crackles. Unlike James (who does not give a name to servants in The Portrait of a Lady), Banville identifies and gives character to the servants in his book, none more so than the redoubtable Elsie Staines, Isabel’s maid.

This is in part a plot device as Staines had learned from Gabriella, Madame Merle’s maid whom she had befriended while in the Osmond’s employ in Italy, that Gilbert had, with Madame Merle’s involvement, contrived a plot involving his late, first wife that was more shocking than their duplicity against Isabel.

Staines reveals the secret and, armed with this information, Isabel comes to realise in her final reckoning with Gilbert and Madame Merle that a remark by Gilbert she had taken to be innocent when in a church in Florence as he courted her was not so innocent after all. (One of several pronouncements and events whose significance had eluded Isabel on her journey). She even wonders if, having moved from “oppressive shadow into the balm of sunlight” on that Florentine day, it was when she had decided to accept his proposal of marriage; a recollection made all the more bitter by Staines’s secret. But Isabel acknowledges that she is, finally, free and that she will be her own woman.

Banville’s novel is in no sense a sequel to The Portrait Of A Lady. With great skill he fills in the back stories of characters in James’s novel so that it all knits together perfectly. In this sense Banville’s Mrs Osmond looks backwards as well as forwards and can be enjoyed as an entity in itself, although the reader familiar with The Portrait Of A Lady can delight in picking up on artful references to James’s novel. Indeed, Banville leaves the reader with a sense of keen anticipation at the end of each chapter, with a nod surely in the direction of The Portrait Of A Lady having first appeared in serialised form in 1880-81.

A key Jamesian theme, of course, is the tension between the Old World (Europe) and the New World (America) over customs, class, opportunity, politics, culture and progress. The new often comes out worse and Isabel describes Rome as being “at the centre of a ruined empire over-run by latter-day barbarians armed with Baedekers and billfolds”. Yet, in a neat twist, she has the implied opportunity to return to the New World and the progressive cause she has funded which is to be established there.

Which path will she choose? She gives no answer. Has the door been left open for another Banville Jamesian novel about Isabel? Whether it has or not, he has with Mrs Osmond left us with a towering achievement.

Mrs Osmond by John Banville is published by Viking at £14.99