Early last year, reviewing an exhibition of Marcel Proust's notebooks and drafts held at New York's Morgan Library, Colm Toibin had some gentle fun.

"Visitors lining up to see the word 'madeleine' as it appeared in Proust's handwriting for the first time are in for a shock," he wrote in a New York Review Of Books blog.

This was true, though no revelation to so-called Proustians. The 1910 draft in question, exhibited at the Morgan to mark the centenary of the publication of Swann's Way, is proof that a founding moment in modern literature was not as the world imagines. In Proust's first attempt there was no magical madeleine. The decisive dunk that launched 1,267,069 words - so the French have decided - was of a simple biscotte.

For textual scholars, it counts as a problem solved. A sponge cake such as the petite madeleine simply doesn't react in tea as the rusk-like bread of the biscotte reacts. In effect, Proust's great moment of overwhelming involuntary memory was misremembered. The "actual" event was rewritten for artistic effect. Things, in his existence, as portrayed in In Search Of Lost Time, were not as they seemed.

That idea might have been calculated to appeal to Charles Kenneth Scott Moncrieff. The short career of Proust's first translator into English was conducted in the margins between competing realities. In one draft of a life, he was the quintessential bourgeois Edwardian Scot, the patriotic war hero, son of a sheriff. In the parallel text, CK Scott Moncrieff was a defiant, raffish bohemian man of letters. And gay.

That connection with Proust is plain enough. As Toibin noted, the novelist wrote to a publisher in 1909 to claim his work as "a genuine novel and an indecent one in places. One of the principal characters is a homosexual." In the worlds in which Scott Moncrieff lived, when the risks in being gay were real, when trivial facts were perceived as indecent, that could have been a precis of the translator's tale.

Jean Findlay is his great-great niece, but her portrait depends less on familial piety than on fascination and affection. Scott Moncrieff deserves both. Modern translators deem his version of A la recherche du temps perdu "flawed" - that Shakespearean title, Remembrance Of Things Past, just for starters - and you could say the same about the man. But consistent in every version of "CK" is a profound sense of honour, of debts owed and paid, whether to family, country, friends, God or literature.

Scott Moncrieff went willingly to the trenches of the First World War and never regretted it. He was horribly wounded and left lame. He saw friend after boyhood friend wiped out. But even after the tide of opinion changed, he refused to insult those dead friends by denouncing the war as futile. He made an enemy of Siegfried Sassoon for his pains, but in one part he remained an old-fashioned soldier devoted to a society that treated gay men with profound cruelty.

Raised a Presbyterian and forever fascinated by that lineage, he became a Roman Catholic. Educated at Winchester and Edinburgh during the last summers of empire, with little interest in politics, he could nevertheless declare, while dying, that "The Scots are quite as capable of governing themselves as the Swiss - and have as much right as they to do so". Denied family life, he was devoted to family, latterly spending money he could not always afford to spend on educating nieces and nephews.

In some sense, as Findlay well understands, a double life suited him. As the modern jargon goes, he could compartmentalise himself. The National Galleries of Scotland have a portrait by Edward Stanley Mercer of a tough-looking figure in the full regimental rig of the King's Own Scottish Borderers. That was one Scott Moncrieff. The same individual was, when the mood took him, "the Rabelaisian homosexual", or the composer of religious verse, or the part-time spy - at no small risk - in fascist Italy.

For a gay man in the first half of the 20th century, disguises and deceits were inevitable. But as Findlay makes plain, a provisional existence was natural to Scott Moncrieff. In one sense, it was the best he could hope for, but the choices forced upon him also answered the needs of a complicated personality. His Catholicism was as sincere as his love of soldiering. His devotion to art mattered as much as his attachment to a thoroughly bourgeois family.

Scott Moncrieff was tough as well as brave. His critical writings were unsparing. His stoicism in coping with his wounds was staggering. Catholic or not, his devotion to the Protestant work ethic was unflagging. Those who find holes in his Proust translations overlook the labour expended in bringing a vast French work to an English audience in the course of eight years while dealing with Stendhal, Pirandello, the letters of Abelard and Heloise, and much else besides.

Yet Scott Moncrieff was no hack. He pursued Luigi Pirandello to secure the rights to the Italian's work because he was convinced that English versions had to be made. His astonishing solo conquest of the Proustian edifice was also done for the sake of literature, not profit. He glimpsed what the Frenchman was attempting long before the Anglo-Saxon literary establishment caught on.

He knew most of them, in his day, from the young Noel Coward to TS Eliot, but the one he truly loved was Wilfred Owen. It counts as the saddest story in Findlay's absorbing book. The reasons for sadness are obvious enough, typical of a terrible war and the society that made the war possible. Owen was killed, despite Scott Moncrieff's efforts to have the ravaged poet transferred from the front. Love was impossible, but it was not reciprocated, in any case, because Owen was not made that way.

Scott Moncrieff was dead of cancer aged only 40 in an Italy whose contradictions might have symbolised his life. In the aftermath of the defining war he could live there cheaply. He could live almost freely, indeed, as a gay man. He could commune with art and with his Catholic God. But fascism's shadow intruded even as, once again, Scott Moncrieff did his bit as a spy for king and country.

Always there was Proust. Those scholars who tell you that Scott Moncrieff embellished the original outrageously - oubli, forgetting or "oblivion", is not "the waters of Lethe" - still concede that the first translation has defined the work for those who can manage only English. The scholars admit that there is poetry and style, a distinctive voice, to the Scotsman's prose that has become Proust, despite all the corrected translations of recent years.

Scott Moncrieff's memorials are various, from medals won under fire to severe military portraits, from filthy limericks to a body of translated work that still shapes literary tastes. Jean Findlay assembles a fascinating man from a strange collection of fragments with style, fittingly enough, and wit.

Jean Findlay is at the Edinburgh International Book Festival on August 13