IT'S shady in the woods. All is green here but for a few neon-bright azaleas bushes and a cloud of wild garlic, billowing fragrantly in the dappled gloom. And then, out of the shadows, something emerges: a drift of white, just visible through the trees. A sheet? Or could it be a curtain, draped, ghostlike over what looks to be a chain-link fence?

Step through one of the invitingly open gates and you are inside a rectangular structure, overhung by a huge, moon-like disc and several objects that could almost be pendant light shades of the kind you might find in a chi-chi city apartment.

But of course, that is absurd. For surely, this is an old tennis court: so overgrown that an ash tree has grown up tall, roughly where the net once hung.

If there ever was a net. One of the support posts appears to be outside the perimeter fence, which, when you look more closely, is sitting somewhat askew atop the court's surface. What's more it looks brand new, despite the place's apparent decrepitude.

Curious and curiouser, Alice might have said, as she took in the incongruous furnishings: a topless table, something that resembles a standard lamp and, at the far end, a rectangular structure that could almost be an open fireplace, though the thought of pulling up a chair in a tennis court that's sort of a room but also, really, just a clearing in the woods, is deeply unsettling.

A “playground for the imagination” is how Martin Boyce likes to think of his new exhibition, which is evocatively titled An Inn For The Phantoms Of The Outside And In. The Turner Prize-winning Glasgow School of Art graduate's landscape sculpture is the latest artwork to be commissioned by the Mount Stuart Contemporary Visual Arts Programme, and it opens today within the grounds of the Victorian Gothic mansion house on the island of Bute.

When I visit, this hugely ambitious piece – which was almost two years in the making – is in a state of limbo that feels oddly appropriate. It's days before the official opening and a few hundred yards away, in the Mount Stuart crypt, Boyce's team are hanging photographs that will be shown in tandem with the installation.

Meanwhile, here in the woods, the inn for phantoms sits: not officially open to the public but with its carefully crafted gates ajar, enticing the curious to wander in and wonder what, exactly, they are looking at.

And that, Boyce tells me, is the spirit in which he hopes his sculpture will be approached.

“I want people to feel they've stumbled across a very strange kind of place. I've described it as one landscape shipwrecked within another; a place within a place. That uncanny or dreamlike sensation is what interests me.

“And of course,” he adds, “everyone will bring their own experiences, memories and references to it.”

Some visitors might detect the thwack of spectral rackets and balls amid the birdsong and rustling leaves. In decades past, Mount Stuart's grounds contained a real tennis court and hazy memories of that vanished structure appear to have found their way into Boyce's new work.

The artist has long been fascinated by disused tennis courts and his photography exhibition, A Partial Eclipse – now hanging in the Mount Stuart Crypt – includes images of some he has documented over the years.

“There is something quite romantic about these places, a kind of melancholy to the landscape, which I think has to do with the passing of time,” he explains. “Plants are growing through the surface, the net has collapsed … And often, these places that used to be about a healthy pursuit have become places where teenagers hang out, or people might meet furtively at night. All different kinds of use or misuse happen there and I like that idea.”

Boyce traces his preoccupation with landscape back to his 2002 show at Glasgow's Tramway, Our Love Is Like The Flowers, The Rain, The Sea And The Hours, for which he used chain link fencing and trees made from strip lights to create a kind of nocturnal city park. What intrigued him was the notion of “combining the urban with the poetic” in order to “conjure up something dreamlike”.

That dreamlike atmosphere is certainly evoked by An Inn For The Phantoms. But although it originated in Boyce's imagination and was substantially planned and modelled in the studio, its creation involved many months of strenuous graft – not to mention heavy machinery.

Some of the artwork's components are enormous, from the metal gates and fence – which were built to Boyce's design by Bute-based blacksmiths – to the tall timber lantern posts, which were created from felled island trees.

Yet despite the huge scale, Boyce wanted to evoke a very particular mood and he spent three weeks here meticulously crafting those enormous components into exactly the right whole.

“When we were hanging the curtains, for example,” he says, “I would do a line where it hung quite regularly but then leave a space where it would hang as if it had come off the curtain rail.” He describes the elements within his sculpture as being “almost like musical notes in a composition – some of them very subtle, others less so but they all add to the textures and atmospheres of the place”.

Those pendant lantern shades, Boyce adds, were originally painted red. But when he visited the almost-completed site he realised the colour would be discordant. “At first, I tried to convince myself I was just panicking, that it'd be OK. Each of those lanterns has four different elements and we'd spent a week painting them red. But I knew it was wrong and we had to go back to the studio and repaint them all white.”

The ghost-like quality that pervades the installation is exactly what Boyce intended and transparent, mesh-like materials – in the curtains, for example, and the huge, weathered pendant “moon” – add to the ethereality.

With the gates permanently ajar, there is also a feeling of transience: you can enter or exit whenever you like and so, too, can the outside creep in, and vice versa. “I was playing with ideas of two different sort of places happening at once,” says Boyce. Partly, he wanted to replicate the perspective afforded by modernist glass architecture but there is also an echo of a crumbled cottage Boyce discovered in the grounds of Mount Stuart, its hearth now open to the elements. In fact, the concrete “fireplace” standing surreally within Boyce's inn of dreams, was also partly inspired by the top of a grand Mount Stuart House marble mantelpiece that was at one time repurposed as a garden archway but has now resumed its place within the elegant drawing room.

Mount Stuart is full of stories. The Crichton-Stuart family who own it trace their history on Bute to the 12th century and their “seats” have ranged from Rothesay Castle (which was destroyed in 1685) and the Old Mansion (which still stands in Rothesay's High Street) to the original Mount Stuart house, which was built in the early 18th century but substantially destroyed by fire in 1877.

The present house, designed by Edinburgh architect Robert Rowand Anderson at the behest of the third marquess, has itself been described as a feat of architectural fantasy, with its gorgeous rooms and stunning painted ceilings – including one decorated with an astrological mural showing the exact position of the planets at the time of the third marquess's birth.

And since 1995, the house has been open to the public along with a visitor centre and grounds, among whose 300 acres generations of lords, ladies, cooks, gardeners and visitors have wandered.

The Mount Stuart Contemporary Art Programme invites artists to “bring new perspectives” to the place and its collections (past commissioned artists have included Christine Borland and Nathan Coley). Asked how the backdrop inspired his new work, Boyce says: “I tend not to delve into the specific history of a place”, adding that he is more interested in “inserting possible fictions” into a setting. But he acknowledges that the atmosphere of the place, and its centuries of comings and goings – both of people and buildings – must have influenced his vision.

Now professor of sculpture at Hamburg Art School, Boyce will be back on Bute this weekend for his exhibition's launch. Is he pleased with his completed inn of dreams? “I really feel happy with it,” he says. “It was only when we were installing the work and I was eight metres up on a cherrypicker looking down on it that I appreciated the scale of the undertaking.”

When you are planning a large landscape piece in the workshop or studio, getting the scale right can be tricky, he explains: “Everything shrinks when you put it outside. I've had that experience before. It's really about getting the right proportions.

“But I really think we got that and I'm totally over the moon with it.”

“Over the moon” seems an appropriate place for an artist to be when he is eight metres up in a cherrypicker, looking down on a huge, white disc that is floating above a Surrealistic tennis court.

And if any phantoms should happen upon this peculiar architectural apparition after dark, they might pull up some invisible chairs by the flameless fireside. There, if they crane their spectral necks and look up beyond the chi-chi lanterns and swaying treetops, they can marvel at this mysterious inn's splendid ceiling, elaborately painted with a million twinkling stars.

Martin Boyce: An Inn For The Phantoms Of The Outside And In is at Mount Stuart, Isle of Bute until November 18. For more information, including transportation links, visit www.mountstuart.com