The Night Watch, by Sarah Waters

Oh what a lovely, lonely war

Sarah Waters writes exhilaratingly about lesbian love and behaviour. A mistress of pastiche Victorian thrillers, of what she herself has named the "faux"-historical novel, she brilliantly combines contemporary insights about sexual politics with page-turning plots. Her lightness of touch and storytelling talent have made her books bestsellers and prizewinners.

Rather than fearing being pigeonholed as a gay writer - as though a gay writer cannot speak to all of humankind - Waters simply makes lesbians the centre of the world. An ex-academic who knows that writers, however committed, must also be voracious readers, she writes in the feminist tradition that draws on both male and female writers for inspiration. She is a sophisticated storyteller who enjoys playing carnivalesque games with plots, and with readers' expectations.

Her fourth novel, The Night Watch, forms a complete departure from her earlier work. Perhaps feeling she has done all she can with Victorian models, she has moved from the 19th century to the 20th, to the Second World War, and to realism.

Now, men are as central to her plot as women. Reggie, a good-looking married ne'er-do-well, seduces Viv. Viv's brother Duncan, imprisoned for a violent crime, is befriended by his cellmate Fraser, a conscientious objector. Later on, Fraser will go out with Viv and begin a romance with her. Meanwhile, Kay loves Helen, and Helen loves Julia, and Duncan remembers his friend Alec.

I was reminded of Muriel Spark, who also likes to intertwine the lives of her characters in complex ways, from pub to women's hostel to train carriage. Waters's women work alongside the men in the war effort, driving ambulances across bomb-torn London and rescuing survivors. Waters has done her research to great effect; the descriptions of the night shifts are mesmerising.

Her formal innovation, in this new work, is to tell her story backwards. It begins with the doubts and anxieties of the postwar landscape, moving behind these to the drama of war in full swing, and ending with the turmoil of life in early wartime. This is no gimmick but makes complete sense if you believe, as Waters so obviously and passionately does, in history, in our need to understand the past in order to explain the present. If, in her earlier work, history was like a colourful backdrop to adventure, here it is sober and bloody. It happens on two intricately connected levels: the personal and the public.

Similarly, the lives of gays and straights are mixed up with one another. While the war deals out death and loss, it also offers new choices; fresh turnings to be taken. Women like Mickie, the garage-hand, or Kay, the ambulance driver, can work outside the home. Emotions can be fluid and volatile. Homosexuality may feel like an identity, deeply rooted, but it can also be a simple action.

Duncan and Fraser, in their prison cell, can sleep together with only the former defining himself as queer. Lesbians come in all shapes and sizes. Though the non-butch writer and BBC radio producer feel compelled to disguise themselves as straight ladies, they are simply people, like the men, as brave, vulnerable and foolish as anybody else.

The story swings along irrepressibly, with only occasional weak moments. In explaining to us how cautious lesbians had to be in the bad old days, Waters can seem occasionally didactic. Sometimes the conversations go on too long. Her accounts of men in prison ring less true than her sketches of female desire and derring-do.

Nonetheless, this is a tremendously confident foray into realism. Earlier feminist/lesbian novelists either veered towards science-fiction and fantasy to imagine a world that suited them or, if they wrote realism, had to some extent to be very serious. Yet Waters deploys realism with the characteristically light touch she developed in her first three novels, Tipping the Velvet, Affinity and Fingersmith.

These books paid homage to Victorian storytelling, and gained much of their power from mixing and subverting contemporary political understanding with luscious tropes of sex and danger. Her literary models, to begin with, seemed less the great realists than the genre writers. Since lesbianism was, according to the straight imagination, on the margins, it made sense to represent it via forms seen as marginal: the penny-dreadful, the shilling-shocker.

Lesbians were outlawed; and so, for pious or pompous critics, if not the great reading public, was genre fiction. Accordingly, Waters exploited this, to sparkling effect. Her trick was to seize the possibilities offered by ghost stories or thrillers and run with them. Rather than turning aside to dally with these marginal or "lesser" forms, as George Eliot did with The Lifted Veil and James did with The Turn of the Screw, Waters confronted them and made their structures central to her tales. She chose the tradition of Wilkie Collins, of Sheridan Lefanu, and danced inside it.

If Tipping the Velvet plays with notions of the New Woman and of libertarian socialism, it is simultaneously a fabulous, sexy romp drawing on Victorian porn. Similarly, Affinity uses Victorian mediumship to explore forbidden desire, and is aptly haunted by previous great 19th-century stories, explicitly invoking James's horrifying Peter Quilp to create the monstrous "control", Peter Quick.

The novel's prose style echoes that of Wilkie Collins and of The Yellow Wallpaper by Charlotte Perkins Gilman. When I wrote my own novel, In the Red Kitchen, about table-turning, trick-turning Victorian mediums, back in the 1980s, I explored female empowerment alongside the Oedipal tale of seduction by the father. Waters takes that Oedipal tale and gives it a new twist.

Fingersmith, the third novel, moved closer to Dickens and his visions of hellish criminal netherworlds, even as it developed Waters's fascination with twinned narratives that both mirror and contradict each other, with faked identities, with the need of the powerless to lie and manipulate in order to survive. Perhaps, like the others, it is a little too long. Certainly, like them, it demands to be read at a gallop. Waters is a very generous writer, who seems to want to give and tell us everything, so much does she love the fictional worlds she creates. The Night Watch is sharply and compassionately observed, richly coloured, and compelling to read.

Michèle Roberts's 'Reader, I Married Him' is published by Virago