HORSE McDonald was in a recording studio in Cornwall when the seriousness of telling her life story onstage kicked in. The Lanark-raised singer/songwriter had just had a two-hour Skype session with writer and actress Lynn Ferguson, her long-term friend and artistic peer, who was turning Horse's true life tales into what has become a one-woman theatre show performed by McDonald, and entitled Careful.

With Ferguson in Los Angeles where she now lives, such transatlantic brainstorming sessions had becoming part of the creative process for Careful, and this session had tapped into some of the more painful areas of McDonald's story. Hyped up on adrenalin and the emotional anxiety of revisiting her past, McDonald's asthma kicked in, and a whole lot more besides.

“I was having flashbacks,” McDonald says midway through explaining the roots of Careful, which runs throughout August as part of the Gilded Balloon's Edinburgh Festival Fringe programme. “There are a couple of stories in there that I've not visited since they happened. One in particular stems from something awful that occurred when I was about seven or eight. You forget that there's all that stuff down there. My biggest fear is that I break down onstage.”

Given the support she has, both from her fanbase and from Ferguson and theatre director Maggie Kinloch, who is overseeing the show, if such an event did happen, it's likely that McDonald would get through it. This has always been the way, ever since the artist formerly known as Sheena Mary McDonald was growing up gay in a macho town in the 1960s and 1970s. Horse's outsider status has remained a constant of her thirty year adventure in the music industry, which has seen her work by turns feted, pigeonholed and at times marginalised, even as her heartfelt songs developed a following which old school major record labels might regard as niche.

“I was never really in the music industry,” she reflects today, some nine albums into her career. “From the outset, I never really fitted in. Any articles about me would go on about this cult lesbian singer from Lanark, rather than me being a great singer or whatever alongside my peers.

“Now Careful has come along at this point in my life, where I ask where I've come from and what I've done, and I think it's got a few important messages in it. I'm talking in it about being part of the LGBT community, because I'm someone who's lived through forty years of struggle, through Section 28, all of that. My life is an example of someone who has been through all of that, and one of the things I can say in Careful is that it does get better. There might be a fear of what people think of you, and part of that could be a fear of what you are. I think that mirrors a lot of people's lives, whether they're gay or straight.”

Named after what is probably McDonald's defining song, co-written with former band member Angela McAlinden and which first appeared on Horse's 1990 debut album, The Same Sky, Careful began from a conversation with Ferguson after McDonald and her wife Alanna were visiting her in America.

“I think I'd been telling my stories since I was ten years old,” McDonald says, “and my wife said: 'Isn't it about time I did something about getting them out there?' I've never really been 'in', but going through all those traumas again did feel like coming out."

McDonald and Ferguson had known each other since the 1980s, when they shared bills together, with Ferguson performing stand-up with Carolyn Bonnyman as one half of the Alexander Sisters.

“I love Horse,” says Ferguson. “She's a properly good human being, and when you meet her it's impossible not to love her. Some people might want to marginalise her, because she's gay, because she's androgynous or whatever, but for me, she's a national treasure. She's this lovely person who's been through a lot of s***, and is the most settled, normal person I think I know.

"What I wanted in the play – and it might be to do with how things are in the world just now – is that all the people shouting are the crazies, and I think we've reached a time where people who are thoughtful, caring and beautiful, like Horse, have to speak out.”

Ferguson wrote the play using a series of storytelling techniques she uses when running classes designed to draw people out enough for their voices to reveal "the real them". The result is a play structured like a musician's set list, so each story leads to another as a song might.

“I'm sort of teaching myself a new language,” says McDonald. “When I first decided to do it, I thought, I've been on a stage, I'll be fine, but this is very different. People have said to me, it's your story, why couldn't you write it, but what Lynn's done is beautiful. It's like a song, and the way it was written was very similar to the way I wrote Careful the song with Angela McAlinden, passing ideas between us.”

Of the song itself, she says: “Careful is a touchstone. It's a thread that's run throughout my entire career. It's the song I always wanted to write. It's my My Way. When I wrote it I thought it was a lovely song, but I didn't realise the impact it would have on other people. The last few years some of my fans have reached out to me, and I never realised the effect it has until that happens. The first time it happened, a family sent me a video of them sitting in a circle, singing it. And then your song is not your own anymore. Music has been such an important thing to me, so when I hear a song that's special to me, I get the gist of what my song might mean to people.”

Like Ferguson, Kinloch was a fan of Horse's music, and when Ferguson approached her to direct Careful, the director says: “It was like a Christmas present."

"She's such a brave and bold performer, and to do something like this, that's not a gig, but is a theatrical experience, I suspect that as a musician she'd just reached a point where she wanted to explore things beyond her music. That's quite a scary thing to do, but maybe it's something to do with where we're at as a society just now, where we need people like Horse to just tell it like it is.”

Beyond Careful, music remains important for McDonald.

“It's like a drug,” she says. “It's something that happened when I was a kid, and started playing the guitar aged ten in my back bedroom. I couldn't talk to anyone, I had no friends and I was very lonely, so I found my own escape. My whole journey has been about getting through all that, and about finding my voice. Now, all these years on, I have my voice, but I also have the joy of performing.”

Careful plays The Gilded Balloon at the Museum, August 3-28, 7.30pm.

www.gildedballoon.co.uk