Rose Tremain puts history in the past

"I went for a fitting for the robes the other day, and of course the robes are huge," she says, speaking from her home in Norwich, where she lives with her husband, the biographer Richard Holmes. "They were made for very tall men and they absolutely swamp me, so there's frantic alterations at the moment. I thought, this is how they saw their chancellor, a fine upstanding fellow. And now they've got me, not only a woman but a writer."

Elegant as she is, she may be less physically imposing than previous incumbents, but in terms of literary stature, Tremain looms large. One of Britain's most atmospheric and subtle writers, with a litany of awards – the James Tait Black Memorial, the Orange, the Whitbread Novel of the year and the Prix Femina Etranger – in her fiction she moves between the modern age and the past as if she's on a pendulum. I therefore understand her faint vexation that she is labelled by some simply as a historical novelist.

The reason for this is obvious. After a handful of novels and short stories that won her critical acclaim but did not make her fortune, she wrote Restoration, a rambunctious, playful and poignant story of a rapscallion physician to Charles II whose origins lie, she frankly admits, in Pepys's picaresque diaries. Robert Merivel, her hero, is one of the most engaging characters in recent literature. His misadventures, while true to his times, feel contemporary in the dilemmas they pose and the faults they expose. Published in 1989, Restoration has remained in print, in several countries, ever since. It seems fitting that the tale of a spendthrift king and his volatile servant has done wonders for Tremain's royalties, and her reputation.

Last year she published a long-awaited sequel, Merivel: A Man Of His Time. As you might expect when returning to a character after an interval of years, this is a more melancholy book, haunted by advancing age and a sense of changing times.

"I'm sure you've read me talking about this before, vis a vis Restoration," says Tremain in her soft, refined accent. "I was trying to capture some of the materialistic culture that gripped us all during the Thatcher era, exchanging honour for material goodies, which is exactly what Merivel does - Then with Merivel, I felt there was something of our own time to be captured there as well, which is to say we live in a time of great uncertainty, the individual feeling his own powerlessness with regard to the future on many, many different levels.

"I think this was happening at the end of the reign of Charles II, who had no legitimate heir, and people were very worried that, as indeed did happen for a while, his brother would become the next king, and he was a Roman Catholic, and people deeply feared, in a way that's difficult for us to imagine, what a Roman Catholic monarch would do to the country." She adds, "The country was also broke, as we are now."

Would she still have written the sequel if she'd found no parallels with today?

"What I told myself is, I will write it one day, because I knew there would be huge personal satisfaction and indeed delight in getting to be with the character again, and I was very interested in where I would pick him up and what he would be like when he was much older, but I didn't quite know when I would do it. And then it suddenly has felt to me in the last four years that there were things I could say through the novel which are about what's happening to us now."

There was another factor too. Tremain turns 70 this summer, a fact that, she says, "has focused my mind terribly". Her mordant sense of humour was piqued at returning to her friend as he enters what, in the 17th century, were his later years.

"That's one of the first ideas that I started with. I thought, well, if everybody's moved on 16 years, from the end of Restoration, then Merivel would be 56 and [his servant] Will would be 74, which would be ancient.

"I thought there'd be huge comic mileage in having a servant who is far too old to do the task for which he's paid, but Merivel is far too fond of him to sack him and, indeed, where would he go? He has this terrible conundrum. Could he send him to the workhouse? But then he thinks, oh no, because he can't work. And then I thought that's also quite relevant to one of the many dilemmas that we're looking at today. Old people: who will look after them? They can't work any more if they're infirm. What will happen to them? Who takes responsibility for this?"

Merivel joins a high-profile list of titles vying for this year's Sir Walter Scott Prize for historical fiction, which will be announced at the Borders Book Festival on Friday evening. Nominees include Thomas Keneally's The Daughters Of Mars, Pat Barker's Toby's Room and Hilary Mantel's Bring Up The Bodies. Among the prize's stipulations is that the winning book "sheds light on the present as well as the past". Does Tremain see this as essential in fiction set in the past, and does this additional depth distinguish her kind of fiction from the more swashbuckling novels that typify the genre? "I do see a distinction," she replies, "but I would say I want the books not to be just about the present or about the 17th century, but I would like them to tell a universal story." With other of her works, as well as the Merivel novels, she hopes readers will get "some ideas about the human condition and how people behave, and the patterns we're desperate to repeat, and our striving not to do that".

Yet while this additional texture helps her write the books, she does not think readers always pick up the echoes she evokes.

"Mainly they are very amused by it, and that's fine by me. It's a skill that not all writers have, to make one laugh. It's perhaps one of the most important things to me. The tragi-comic is my most preferred mode. It's perhaps hard to do, and perhaps we Brits are quite good at doing it, because our irony is very finely tuned. In the letters I still get about Restoration, the two things that people say is they find Merivel very lovable and that he makes them laugh. That's enough. That'll do fine."

Since she is a leading contender for the Walter Scott prize, I feel obliged to ask if she has read many of his novels. She laughs. "I've read Ivanhoe, and that's probably about it. In our little flat in London we have got the entire Waverley novels in rather a lovely edition which Richard was given by his father, and there they are, all ready for us to take down. I think somehow there's the feeling with Scott that you need a lot of time. I think so. Because they are very, very dense, and they are very long, and I suppose the construction of novels at that time was very different – there was an enormous attention to detail and scene evocation.

"It's rather unfair to say that actually I've read more Russian and French 19th-century novels – Tolstoy, Dostoevsky, Balzac – than I've read Scott. Why should that be? Yet he was hugely popular in his day. Maybe if one can just allocate the space and time to get into them, they would fantastically repay. I'm sure that's true."

Keen to resist her pigeon-holing, whatever the outcome of this prize, Tremain hints that she may be about to change direction.

"People seem to take more note when I publish another historical novel, but I'm not sure I'm going to do any more of them. I think maybe I just want to set out a contemporary marker a bit more strongly."

At this point, she begins to sound politely weary of the subject.

"To be honest I don't see them as madly different because in each case you're projecting your own imagination into the soul of somebody else, whether they lived yesterday or a long time ago. The imaginative projection is what is going to get you there, not just the historical detail."

For details of Borders Book Festival, go to www.bordersbookfestival.org. Merivel is published in paperback in July by Vintage, priced £8.99