Zandra Rhodes: After years in the fashion wilderness the grande dame is back

She's back, designing costumes for the opera and being fêted by a clutch of big-name designers

We are due to meet Zandra Rhodes in the "royal retiring" room just behind the regal box in London's Coliseum Theatre. It is an appropriate setting because, these days, after nearly 40 years in the business, Rhodes is considered something of a grande dame of British fashion. She breezes in, dressed head to toe in flowing African prints held together with a thick diamante belt. Her lips are shocking orange, her eyes a smudge of turquoise and her trademark fuchsia hair is verging on the neon. "I'm so sorry about my appearance," she says. "I'm doing some painting this afternoon, so I've had to dress right down."

For weeks now, Rhodes has been working away in the bowels of the Coliseum, putting the final touches to the costumes she is designing for a new English National Opera production of Aida. It is the third opera she has worked on but her first in the UK, after The Magic Flute and The Pearl Fishers in San Diego. As she rifles through the rails of her work – gold lamé floor-skimming skirts, enormous pleated kaftans and turquoise leopard-skin body armour, it seems Verdi's Egyptian extravaganza was a project crying out for her famously flamboyant touch. She flicks through a fat portfolio of 200 designs – for the princess, the slaves, Aida and the enormous chorus. It is a far cry from the average catwalk production. "With costume design you can be more exotic," she says. "You can let yourself go, be larger than life and make big, big statements."

Rhodes trained as a textile designer, graduating from the Royal College of Art in 1964, and her passion for print remains. For Aida, she ransacked her own impressive back catalogue, drawing on a collection she showed in 1986 inspired by a visit to the pyramids. Coincidentally, this was to be the last catwalk collection she showed in London for 20 years.

"There was a period," she says, "when nobody wanted to know." But in a career spanning four decades it is not surprising Rhodes has had her moments both in and out of fashion. In the 1960s, when she opened a shop on the Fulham Road stocked with radical print designs, she quickly became a major name on the world fashion map. "Then the 1970s came along – all exotic kaftans, beautiful, long, luxurious coats and me with bright-green hair," she says. Towards the end of the decade her innovative use of exposed seams and jewelled safety pins established her alongside Vivienne Westwood as the doyenne of British haute punk. In the late 1980s, however, the tide turned.

"It was all about power dressing and that wasn't really me," she says. With everyone swanning around like young Tories, Rhodes' colour-crazed hippie chic aesthetic could find no place, leaving Rhodes wandering in the fashion wilderness. It must have been an awful time, but she remains matter-of-fact. "Things happen like that. It's the reality of life. I thought, 'If no one is taking any notice of my work, I still believe in it.'"

She never stopped working – this is a woman, now in her sixties, who commutes fortnightly between London and San Diego, where her partner has retired. Back then, she continued churning out her collections and did a bit of work with Liberty. "Then, halfway through the 1990s, I got all these people coming up to me and saying, 'I've just seen the Galliano collection and it's so you.'" Interpretations of Rhodes' prints were surfacing on catwalks everywhere from Dior to Fendi and Gucci to Miu Miu. "I felt like one of the Beatles again. Suddenly I was seeing all these things I'd designed myself and realised people really wanted me back."

Buoyed by a new sense of purpose, in 2003 she opened the Fashion and Textile Museum in her beloved Bermondsey. A stone's throw from Borough Market, the museum hosted fashion exhibitions and was home to Rhodes' own vast collection. Rhodes is a designer fortunate enough to have had the foresight to hold on to virtually every piece she has ever made. "It's not because I'm clever," she says, "it's because I'm a terrible hoarder. I've got 70 trunks filled with the stuff. No one was taking any notice of my clothes towards the middle of the 1990s. I didn't want to donate them to the V&A so they could get stored in a basement for no one to see. I wanted them to come out and show themselves."

The museum received a mixed reception. Some said it was a vanity project, others that it was ill-conceived. It was always perilously underfunded. Rhodes threw herself into making it work. "It cost a minimum of £50,000 to host a show there," she said. "I was jumping through hoops to raise money." In 2005, the exhibition space closed down but, in true Rhodes roller-coaster style, the museum has been taken on by Newham College and is now a hotbed of activity among student designers. It is due to re-open in December.

It is not just Rhodes's museum that is enjoying a renaissance. Last year, the designer staged a catwalk show in London for the first time since 1986 and the design fraternity is increasingly vocal in its support. Tom Ford is a collector, as is Anna Sui, and many major museums now have pieces of her work. These days her clothes are as likely to be seen on Kelly Osbourne and Paris Hilton as on Princess Michael of Kent. Still, Rhodes shows no sign of slowing down.

"My time has come again," she says, "and I'm making the most of it. I could never imagine retiring. There's no way I'm going to turn into a little grey old lady."

'Aida' runs until 7 December at the Coliseum, St Martin's Lane, London WC2, www.eno.org