That historical wizard of Oz

An epic teller of truth that trumps fiction, Thomas Keneally still dreams of a republican end to Australia's story

Just as surely as it takes a pea to distinguish a real princess, so there is also a test of the true republican. Arise, (and overthrow the old order) all those who noticed the absence of monarchy at the Sydney Olympics.

Just as surely as it takes a pea to distinguish a real princess, so there is also a test of the true republican. Arise, (and overthrow the old order) all those who noticed the absence of monarchy at the Sydney Olympics.

Still sitting? Well, just seconds into my conversation with Thomas Keneally, that finder of lost stories and real republican launches into this: "I felt that since the [republican] model hadn't been accepted by the country, then the Queen should have in fact opened the Games. Either the Queen is our head of state, or she's not. If she's our head of state, she should have opened the Games.

"But our monarchist prime minister would not invite his own head of state to open the Olympics; he used the governor-general instead. Because it would have focused attention on the anachronistic nature of the relationship."

Committed republicans aren't just acutely aware of monarchy's whereabouts; they are also - like princesses - sensitive to their surroundings. This interview takes place in a London hotel bar, designed to look like a gentleman's club crossed with the trappings of polo.

Keneally is shifting about in his seat, unable to rest easy. It's the decor, of course, the fake polo pageantry. Only three weeks previously, I interviewed a Great American Novelist in exactly the same spot, without the Great One giving the surroundings a second glance. Imperial trappings don't register with those who take as God-given the right to choose president over crown.

For Keneally, a novelist who tackles the big moral issues as readily as other writers self-obsess, the question is a live one. "It makes sense for Australia to become a republic," he says. "To show that we're fully committed to our own history, we're not living in some mythic past represented by this particular bar, if you look round at the polo...". He grimaces.

"When we become a republic," he continues, "we can then come to a genuine acknowledgement of the aboriginal occupation of Australia. Once that has properly entered our imaginations, then it would be possible - when we try to be heavy with Indonesia about their human rights record, not least in East Timor - to speak with more authority. So not only is there a moral imperative to clear up these issues, there's also a regional imperative to do so."

Keneally is a little guy who has taken to writing big books. His new novel, Bettany's Book (Sceptre, £16.99), is a mammoth 598 pages, taking on - as he puts it - "a huge range of issues, colonial Australia... and even world issues, like the relevance of aid". Unassuming, in a beige zip-up cardigan (he saved his really loud Mambo shirt for the Cheltenham literary festival), grey trousers and a flat black cap, Keneally takes easily to being moved from room to room by officious waiters who want breakfast to have precedence over the recording of an eminent novelist's views.

The exceptional aspect of Keneally's appearance is his beard, carefully shaped to curve gently round his chin, so his chubby, smiling face looks like it has been underlined. It takes some effort to achieve such a beard, as witnessed by two red shaving cuts on one cheek. Keneally's father, who died just last month aged 92, was, he says, "kind of natty, dapper, in an old-fashioned 1940s sort of way". The beard is the son's tell-tale bit of personal vanity beneath the regular-guy exterior.

Four times nominated for the Booker Prize, and once a victor (in 1982, for Schindler's Ark), he has been a full-time writer for practically his whole career, with only occasional bits of academic work.

And yet in his work the writing is really secondary to the message. Bettany's Book tells several neglected stories with fervour: subjects long relegated to history, or else present-day stories to which we become indifferent in news reports - such as starvation in the Sudan. It will be hard to forget Keneally's description of people raking camels for fleas to eat.

But when Keneally is making stuff up, the writing and characterisation are oddly lacking. There's an example of this early on in Bettany's Book. One of the main characters, a student called Prim, is having an affair with a married lecturer. Her lover inserts copied-out passages in her thesis, so that he can claim she has cheated, and thus get rid of her. It sounds so implausible in the book, I thought it had to be factual; it doesn't work as an invention. "Well, it grew out of the awareness that men in that situation will sometimes do exceptional things to get rid of a troublesome lover," says Keneally.

His novels work far better where the material is based on truth, as he readily explains is often the case. This suits him. His own real-life gentleness of nature (the Queen is undoubtedly a good old stick, he says) need not restrain him in fiction. "Since first going to the Sudan in '87, I've taken an interest in the country," he says. "Economically and politically it has - well, I can't say it's gone into decline, but it has all manner of problems. Amnesty International are concerned about the existence of torture houses - ghost houses as they're called. No one knows where they are and their existence can be denied and the existence of the prisoners in them.

"I came across a newspaper report, on the internet, about a National Health doctor in Britain, a Sudanese refugee. He went to a medical health conference and saw two of the doctors who'd participated in his torture there, and he denounced them to the BMA. That was the sort of thing I used in the book, that's what happens at the end of the book, with Prim's lover Sharif, when he encounters the two doctors."

His novels are traditional, despite his radical outlook. The Chant of Jimmie Blacksmith, Confederates, Schindler's Ark and Bettany's Book come closer to George Eliot than to James Joyce. Does he - anxious for an Australian republic so that the country can become truly innovative - think experimental fiction will turn out to have been just a passing phase? "I was hoping that some of my novels were modernist and post-modern," he answers, a little riled.

Then, relenting, he adds: "I've gotten to like big, meaty novels. And at least I'm into meta-fiction to the extent that I like novels with various texts in them - bits of journal, letters, colonial documents."

Keneally's most problematic use of real material came in his best-known work: Schindler's Ark, later turned into the Spielberg film. The novel came out of a meeting between Keneally and a luggage merchant he met in Beverly Hills, who told him about Oskar Schindler. As book and film, the work now defines most people's sense of the Holocaust, which is to say that most people today think it can be understood through the medium of a film or novel. But this is not the case; and the repercussions of Schindler's Ark define the problem with Keneally's use of real material. Equally, it shows just why he is such a big deal.

Keneally is an odd mix of an author who relishes the past, and yet also worries about being "stuck in the past". "The big problems that the former dominions have is that their dominion status made them receptors of technology," he says.

"This dampened the impulse to innovation - which is now fermenting in Australians, but the structures may not be in place as they are in California." He's a reformer, then, anxious about being shackled by history.

His own history tells a story of an ever-shifting world. Years ago, he entered a seminary to train for the Catholic priesthood before changing direction. The seminary at which he studied is now an International School of Hotel Management - and its most celebrated graduate a lapsed Catholic, with a republican agenda.