In the imaginary past, writers hid away in garrets, drinking cheap wine and waiting for the muse to pay a visit. In the real present even dreaming of such a life is dangerous, and it is a financial necessity for authors to seek fame and fortune by touring the book festival circuit and entering competitions. Kevin MacNeil’s third novel, The Brilliant and Forever, is set on an island where everyone aspires to be a writer. The cultural highlight of the year is a writing festival where authors air their works in public to compete for book contracts. It is a surreal world: there is harmony among friends but the society is deeply divided between ‘whitehousers’, ‘blackhousers’ and, bizarrely, talking alpacas. The novel is both a satire on egotism and a celebration of writing as a way to excavate consciousness.

I meet MacNeil in a café overlooking The Meadows in Edinburgh. He is neatly unshaven and has a faded blue ring in his left ear. His elegant white shirt and a purple cardigan match his calm, collected demeanour. His hazel eyes, however, are alert as he leans across the table to talk. An obsessed cyclist, he has the sturdy thinness of someone who has covered thousands of miles on the bike. Outside, a few University buildings are visible through the leafless trees. MacNeil studied ethnology at the School of Scottish Studies, a useful degree for a writer as "it encompassed everything from material culture to custom and belief". Born in Stornoway in 1972, he is now resident in London. He tells me he is in Scotland to finish a film about Hamish Henderson, one of the founding members of his old School.

Our conversation moves from Henderson to MacNeil’s own work. His voice retains the lilt of the island of his youth. Lewis, however, is not a place he consigns to the past: “It’s still home. Islanders always say: when are you going home next? They don’t mean to the house you live in. They mean to your home island. I think all islands have something common to each other. [It’s] something to do with independence and being naturally – not even wilfully – set apart. I’ve lived in Shetland and Skye and you can see something in common between the islands, even if culturally they seem different. But the novel is not about Lewis.” MacNeil demonstrates a nuanced understanding of island life: “If you grow up on a small island you kind of have this idea of being part of a minority foisted upon you. It’s an illusion you buy into, [and] you begin to feel because you’re ignored as a culture, you’re largely ignorable.”

In The B&F the islanders’ native language – which some readers might assume is Gaelic – is outlawed and the festival only accommodates work written in English, but he didn’t want to write a parochial novel and “it’s not specifically about Gaelic…it’s about minority languages. One of my favourite quotations is that ‘art is a lie that reveals a greater truth’. I think that’s nowhere more true than in the case of novels. Some people will read it as being about Gaelic [and] there are people with this inane antipathy towards Gaelic, so much so that they think Gaelic road signs are the work of Satan. In the novel people become physically violent and kick road signs. All I’m doing there is taking something that is absurd – hatred of a language – and making it entertaining to point out something of greater import.”

Although MacNeil’s tone is light-hearted, there is a seriousness beneath it, and characters who seem like caricatures – Archie the Alpaca for instance – soon begin to take on a tragi-comic hue. It is an achievement that takes hard work: “I agonize over every sentence to give them humour and energy and movement. Some of my books might feel like a quick read but I hope there are nuances that open themselves up on repeated readings. I think that comes from beginning my writing life as a poet.” MacNeil’s first book of poetry, Love and Zen in the Outer Hebrides, was published in 2001 and won plaudits for its playfulness and wild energy. His debut novel, The Stornoway Way, was about a man struggling to love his homeland, and his second novel, A Method Actor’s Guide to Jekyll and Hyde, concerns an actor in a stage adaption of Robert Louis Stevenson’s classic whose sense of fiction and reality start distorting the world.

Did his new novel grow out of a concern with contemporary literary culture? “It started with an intangible thing that I wanted to make more tangible,” he replies, “which is this: I think people, no matter who they are, often have a far more fascinating inner life than we realise. If you meet someone for the first time you might make a superficial judgement … but if that person were to share with you a story they wrote it gives you a much greater insight into who they are. That led into ideas about the X-Factorisation of culture, and I came up with this idea of a [book] festival that’s akin to a cross between a rock festival and the X-Factor where people are showing you something of their inner selves - like seeing into somebody’s dream - but their being judged for it.”

It is an environment that can turn writers into the equivalent of boxers, the winner marching to the podium, leaving a trail of blood and shame in their wake. But MacNeil’s satire is less about festivals and more about human folly: “you can have the most life-affirming, mind-opening and joyful experiences at book festivals, and some of my best memories are of book festivals in all corners of the world. But competition is not necessary. I think you can compete with yourself and not feel envy at another author when they’re successful…the petty envies and rivalries that can arise between artists can be quite unhelpful.”

One of MacNeil’s characters, Seth McNamara, embodies this sort of vanity. His life and work is gratuitously violent, and his style ironic and detached. “With Seth I think I was making a comment on writing that doesn’t have a well-calibrated moral dimension. I don’t think novels should be preachy, and I think there needs to be subtlety. But writing is quite a powerful tool and as I get older I [have]a desire to write something which is going to be a force for good in the world. I also wanted to suggest that some of the stereotypes of writers are outmoded, that the self-destructive behaviour that some writers indulged in is outdated.”

The novel’s protagonist is taken in by a Zen teacher, Hibiki, whose philosophy is summed up with a quote from Thoreau: “How vain it is to sit down and write when you have not stood up to live”. I suggest that the trajectory of the novel is that of a writer relearning how to write by relearning how to live. “Yes. One of the things I’m increasingly fascinated in is what it means to be a writer. I think that if you can become a better person you can become a better writer. It’s not really competition that’s unhealthy, it’s things that foster egotism. The greatest fiction of all is the ego. It doesn’t exist. It’s always changing, and it has no fixed substantial identity. But we forget it is an illusion and we chase it and try to feed it…I think the narrator of the novel is putting his ego to one side, seeing it for what it is, and trying to be there for his friends.”

MacNeil has been a Buddhist for over 20 years, ever since as a teenager he found a copy of D.T. Suzuki’s Living by Zen in a Stornoway bookshop. I ask if there are parallels between meditation and his writing. “When it’s going well you’re the pen, and the writing is almost like an act of meditation. There’s an old Zen phrase: ‘I collect water. I fetch sticks. Miracles.’ It’s about seeing the extraordinary in the ordinary.” In The B&F, “there’s a character called Peter Projector-Head. It seems ludicrous and cartoonish to have a character who has a projector in his head, projecting this tumbling waterfall of thoughts and images, but he can’t live in the present moment, and it’s a tragic thing…[he] exemplifies something that a lot of people do. A lot of people live in the past or in imagined futures, and they don’t live in the present.”

MacNeil’s quirky style incorporates the words of fictional and real writers into the novel’s fabric, from Peter Projector-Head to Italo Calvino. His metafictional references are serious fun - akin to “a musician referencing a riff” - and tell of a life spent before the altar of the written word, and he is grateful to those writers who, whether rich or poor, famous or not, have left behind works which enrich the mind: “Some years ago in the Czech Republic an Irish writer and I were asked: who do you write for? At the time I said: ‘I think I write for the future; I think I’m writing for people yet to come.’ The Irish writer said: ‘I write for my predecessors; I write for the people who came before.’ That didn’t really make sense to me until recently and I realised that the debt of gratitude I feel for those writers who went before me is very profound.”

The Brilliant & Forever is published by Polygon, £9.99. Kevin MacNeil will be at Aye Write! Festival on March 12