How do you rewrite a sonnet?

Dulwich Picture Gallery in south London, famous for its exquisite architecture, is due for a revamp. Will they get it right? Jonathan Glancey reports

Perhaps Dr Faustus turned Edward Alleyn's head with his fanciful quest for divine knowledge. Alleyn was the Jacobean actor who played Tamburlaine, Barabbas and Dr Faustus in Christopher Marlowe's visceral and sensational tragedies. But, where Faust was sensationally selfish and signed his soul away to Lucifer, Alleyn founded the College of God's Gift, which became a charity in 1619 and, in 1811, sired Britain's first public picture gallery. The kernel of the collection was bequeathed by Alleyn at his death in 1626.

Dulwich Picture Gallery, designed by Sir John Soane (1757-1837), has grown from these dramatic Jacobean beginnings, and certainly since 1814 when Soane finished work here, into a gallery with an international renown that has, in recent years, weighed heavily on its slender architectural shoulders.

Soane, one of the most imaginative architects of the Napoleonic era, had dreamed of an ambitious pantheon to the arts, but a budget of a little less than pounds 10,000 encouraged, or forced, him to squeeze his ideas into a ball. The result is one of the most delightful and important buildings of its, or any other, era, at once austere and poetic, a masterpiece of composition and compression. This is architecture in sonnet form.

Today, the pint-sized gallery is too famous for its own good, a Mecca for architects and architectural students from around the world. An ever increasing number of visitors come not just to see the building but to gawp at its superb collection of paintings stacked three, four and even five high under Soane's revolutionary, top-lit galleries.

As the building is great architecture condensed, so the collection is as rich and subtle as a 1976 burgundy. Here, Rembrandt jostles for attention among Cuyp and Van Dyck, Rubens and Murillo, Poussin and Gainsborough. Collected, for the most part, in the 1790s by the art dealer Noel Desenfans for a putative National Gallery in Warsaw, the bulk of these had been sold to Sir Francis Bourgeois who left 371 of them to Dulwich College in 1811 together with pounds 10,000 for their maintenance. This led to Soane's commission, and the gallery we know today.

Extending the gallery has become a necessity. Cramped, and lacking in virtually every modern facility (a virtue to incurable romantics, a vice to curators), Dulwich is looking to expand.

Before anyone throws up their hands in horror - how can a sonnet be improved? - it must be said, and clearly so, that the proposed extension is modest, gentle and self-effacing. Designed by Rick Mather, who is currently working on designs for the Neptune Court at the National Maritime Museum, Greenwich and a revamp of the Wallace Collection in London's Manchester Square, the proposed buildings will form the suggestion of a glazed garden cloister fronting Soane's original entrance. Soane's building will not be touched, except in so far as what are now a comfortable old gents' lavatory and storerooms upstairs at one end of the gallery will in future be space given over to paintings.

The new lavatories, along with a new cafe, lecture theatre, schoolroom for visiting children (more than 8,000 this year), storerooms and gallery offices, may be housed in an empty wing of Dulwich College, but as the gallery is now independently run, with a new board of trustees formed in March 1994, detailed negotiations are still under way.

The trustees and the gallery's recently appointed director, Desmond Shawe- Taylor, will be looking at a probable cost of just under pounds 10m, which is modest, and which it hopes will be largely funded by the Heritage Lottery Fund, with the remaining 25 per cent coaxed from the private sector. Although the new board of trustees includes at least one billionaire (Lord Sainsbury, the supermarket tycoon) and funding should not, ultimately, be a problem, it would be wise for the gallery to seek backing from diverse sources. If not, it could well be in danger of appearing to be bullied by those with time and far too much money on their hands. The day of the Edwin J Cheeseburger III-style museum extension may not have died (sadly), but a modest gallery such as Dulwich deserves a modest strategy to ensure widespread goodwill as well as a long-term future. The gallery is a local institution as well as an international phenomenon; big financial guns must report here quietly.

Assuming the planned refurbishment and extension of the gallery get the go-ahead, what will visitors coming to Dulwich see when work is complete at the turn of the century? Nothing much. Nothing much at first, that is, but that is Mather's intention. A sensitive and sensible architect with a proven record of designing a form of modern architecture that is almost filigree in its lightness of touch, Mather has arranged his new glass buildings along the old brick wall that fronts College Road and hides the gallery from visitors until they turn through the main gate. Here, Mather will have them walk straight on to Soane's building, or turn left or right. To the left, the architect plans a formal garden in which visitors can take chairs from the cafe in summer and sit in the shade of the generous old trees that characterise the much loved garden. On the right, a glass door will take visitors directly to the cafe, lavatories, lecture theatre and classroom and so, along a cloistered walk, to a side entrance into the gallery.

Extra storage space, and a new gallery in the annexed college wing, will allow curators to hang paintings a little more generously than at present: the overall effect inside Soane's original building will be one of uncluttered and subtly lit harmony. Of course, there is a case for a Regency-style clutter of paintings, but for those with less than 20:20 vision, high- rise stacks of Gainsboroughs are as unkind as they are far out of reach. As the gallery refuses, point-blank, to provide ladders and glasses for those short of sight (and height), the selfish pleasure of enjoying masterpieces packed together will have to be denied to those who would prefer to see the gallery pickled in Regency aspic.

Mather's proposal promises to provide Dulwich with the extra space and facilities it wants without in any way threatening or squaring up to the existing architecture. However, there will, undoubtedly, be those who will argue that if there has to be an extension, then surely it would have been better to consider burying it underground, or else placing it further away from Soane's free-standing gem; certainly, there is room in the garden. Building underground, however, can be costly, and, in this restricted space subterranean galleries and lecture theatres might be rather claustrophobic. In any case, who wants to visit this delightful garden (with rather a nice gallery attached) only to be forced into the bowels of suburban soil? Soane, of course, might have been taken by the idea; a gloomy man, much given to thinking about death and sketching tombs, he designed a remarkably poignant (and even sinister) last resting place for Dulwich's benefactors, Sir Louis Bourgeois and Mr and Mrs Desenfans. Where is it? In the very heart of the picture gallery. When I first came here on top of an RT bus (a number 12 from Aldwych), clutching a 2s 6d Red Rover ticket, what I remembered most on the slow diesel ride home were Rembrandt's haunting portrait of a young man (brown on brown on haunting brown) and the deliciously spooky mausoleum, the stuff - for a child - of Hammer films and dreams of Eygptian tombs, King Solomon's Mines and lost treasure. The real treasure was, of course, the building and its collection. We all have to learn.

A free-standing building elsewhere in the grounds would be a mistake, as it would gobble up a lot of land. No, Mather's plan - assuming that Dulwich Picture Gallery must be extended - is a good one. It will frame the gallery without drawing attention to itself. The important thing is that it is immaculately detailed. The trustees cannot allow themselves to agree to designs and a budget that will result in an extension that may fail to stand the test of time. Soane created a masterpiece that has matured over the years and won admirers around the globe. At a rough estimate, his budget of just under pounds 10,000 works out at about pounds 6m today.

Assuming Mather's designs can be funded, the next important thing is to ensure that the picture gallery is supported by a comfortable financial cushion. After it was bombed in 1944, repairs, under the direction of Arthur Davis and Edward Maufe, took six long years to complete. Even then, the gallery was not restored to anything like its original Soanian splendour until a later refurbishment in 1980-81. Though abounding in treasures, it has never been flush with cash, nor, until recently, particularly secure.

With money in the bank and the facilities it wants in a necklace of new glass buildings, Alleyn, Desenfans, Bourgeois and Soane should all rest in peace. As those they provided for, we should be able to relax, too. Mather has not set himself up to create some sort of "witty" Post-Modern architectural dialogue with his illustrious predecessor, nor to mimic his distinctive style.

Soane was an original, and Dulwich abounds in inventive detail and an imaginative coupling of unlikely spaces. A wannabe Soane could only undermine the emotional purity of this special, curious and engagingly intense place. Dulwich is of international importance, as well as being deeply ingrained in local affection: Mather's modesty of ambition is a good match for Soane's modesty of means.