He thought he would become an academic, yet - despite a detour into Peruvian politics - his novels are now well installed on literature courses. Mario Vargas Llosa (right) explains to Huw Richards why he would rather write and teach than be president

No!" The response is vehement, almost shouted. Mario Vargas Llosa has a watchful, self-possessed charm which suggests that he rarely, in public at least, loses control. Yet that surge of emotion when asked whether he would seek political office again shows how deep was the impression made by his experience of running for the presidency of his native Peru in 1990.

It is not inconceivable that his fellow countrymen might try again to persuade Vargas Llosa, novelist, politician and most famous living Peruvian, to come to the aid of his country. After all, it happened in the late 1980s, when Alan Garc!a's populist government grappled unhappily with a stumbling national economy and the violence of the Maoist guerrilla group, Sendero Luminoso. If the call came today, it would be to help restore the democracy destroyed in 1992 by Alberto Fujimori, whose late surge to defeat Vargas Llosa in the 1990 elections was as extraordinary as if Tony Blair were to be pipped at the next British poll by Screaming Lord Sutch.

But Vargas Llosa is now in his 60th year, and his decision never again to seek office appears immutable. He is similarly reluctant to accept public appointments, and turned down the presidency of the Instituto Cervantes, international cultural arm of the Spanish government, when it was offered earlier this year by new premier Jose Maria Aznar: "It is very important for a writer to preserve his independence, particularly if he is always involved in debates. Without that independence you lose credibility. It would have made me a civil servant and a part of the power structure."

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He has a clear conception of himself as a writer before anything else: "It is my vocation." To return to that vocation in 1990 after three years largely devoted to political activity was evidently - in spite of the frustration of defeat - an immense relief. A Fish in the Water, his personal account of the campaign - which inter alia makes a more compelling case for capitalism than anything by Friedrich von Hayek or Milton Friedman - is ingeniously intercut with a vivid memoir of his youth. It might better reflect the growing horror he felt at the impact of conventional political behaviour on a campaign founded in genuine reforming idealism if it were renamed A Fish Out of Water.

How one regards his defeat has as much to do with his attitude to individual artistic endeavour as to the reforming, free-market programme on which he ran. There should be a number of people capable of giving Peru competent government. But there is nobody else who can write Vargas Llosa's novels and essays. It is highly unlikely that he could have combined the presidency with writing the novel that first appeared as Lituma en los Andes three years ago, and has just come out in English as Death in the Andes.

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Yet while only briefly a politician, he has always been political: "I have always been interested in political debate and as a young man was influenced by Sartre's idea of the intellectual engage. Maybe it is possible for writers to be detached where you have stable free democracies. But while my political views have changed since I was young, I still believe that in a country like Peru which has such immense problems, writers and intellectuals should engage with public issues and debate."

The extent of that engagement may be seen in Making Waves, a collection of his articles and essays published simultaneously with Death in the Andes, which demonstrates not only his intellectual evolution from youthful Marxism to free-market liberalism, but a formidable breadth of interests. These encompass literature, politics and art, sport, national identities and even the trials of parenthood. "My Son the Rastafarian", an account of his son Gabriel Gonzalo's spell as a follower of Ras Tafari, manages to be simultaneously touching, sad and riotously funny. He says: "It is ironic and a little sad that after writing so much in my life, I have had more response from readers to that one article than to any of my novels. So many people are worried about their children."

That universality reflects his intellectual voracity: "Everything I do, see or read is raw material for writing," he says. It may also be aided by his cosmopolitanism - he has spent much of his life outside Peru, holds Spanish citizenship and is equally at home in France and Britain and their languages.

His fiction is largely set in Peru. But there is no sense of restriction in this, any more than in Gabriel Garc!a M rquez's fictionalised vision of Colombia or Carlos Fuentes' Mexico. As his fictional creation, Danish engineer Paul Stirmsson, says in Death in the Andes: "[Peru]'s a country nobody can understand . . . And for people from clear, transparent countries like mine, nothing is more attractive than an indecipherable mystery."

One reason Vargas Llosa does not regret the time spent on his presidential campaign is that "I learned a great deal about myself, and about Peru". The self-exploration of his fiction is always part of the search for clues to this "indecipherable mystery" of his country. He says: "Peru is not one country but many, and the different parts are not fully integrated. We have people living like prosperous Europeans in Lima, and others in remote parts of the country whose lives are little different to those of the Stone Age. There are problems of economic development and of terrorism, systems of belief varying from conventional Catholicism to the sort of magical-based religions still practised in the Andes. There are people of European descent and indigenous people. This diversity creates a great challenge for the country, but an incredibly rich culture, a sort of crossroads for all the great economic, cultural and political issues of our day."

Vargas Llosa and the other leading Latin American novelists are now so well-established as worldwide literary figures that it is a shock to be reminded that this is a recent development. Yet, as he recalls: "I had to come to Europe to discover Latin America. In my youth I read North American, French, Italian or Spanish novels, but only read writers from Latin America when I was obliged to by school or university courses."

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He recalls the impact made in France in 1962 by the previously little-known Argentinian writer Jorge Luis Borges: "The French were stunned by this incredible intellectual who was so regional, but at the same time seemed to speak every language and could lecture beautifully in French on a range of subjects." Garc!a M rquez, Julio Cort zar and Octavio Paz were also, he points out, in Europe during the same period.

His famous political differences with Garc!a M rquez have decanted engagingly into Spanish politics with Vargas Llosa backing the current Spanish premier Aznar while the Colombian, embracing Felipe Gonzalez at the end of a pre-election visit was told by the embattled socialist premier that "You may be the last person in Spain who still wishes to do this". Yet Vargas Llosa's artistic regard for Garc!a M rquez's work remains: "One of my earlier books was a study of his work and I still greatly enjoy and admire his books," he says.

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While his work has elements in common with magical realists like Borges and Garc!a M rquez, it is closer to the classical European style, making it more approachable for the European reader: "Beginning a book is very difficult and my first versions are very chaotic. There is a lot of routine and boredom, but I know that if I persevere all this will have its value. I start with an idea of a project, but find that once I start to write, new ideas and images occur and the story starts to develop in a certain way because particular characters start to intrigue me. It is a very mysterious, not totally rational process, developing from a dark and emotional side of the personality which I find very interesting."

His interest in analysing the creative process extends to other writers. He holds a doctorate from Complutense University, Madrid, and planned to have an academic career: "I did not expect to earn enough from writing to make a living." He spent three years in the 1960s lecturing in London University, first at Queen Mary and then at King's, and while massive international sales of his novels have freed him from the necessity to teach he continues to do so, with a succession of visiting chairs at European and American universities: "It is enormously fulfilling. You read in a different way when you have to explain how and why a poem or a novel is constructed or how literature relates to important areas of life. You need creativity to do it."

Creativity as opposed to the destructiveness he identifies in postmodernist critics. He feels so strongly that, for the only time in a 90-minute conversation, his immaculate, elegant English becomes slightly scrambled, as he derides the influence of Lacan and Derrida as "complete buggles".

He argues: "It has nothing to do with literature. These critics are very artful and sophisticated charlatans who have devised brilliant arguments to show that literature has nothing to do with life, history or society. It is a frivolous entertainment of highly pessimistic intellectuals who have reached a point of despair. It is totally negative and unfortunately has had a great impact on American literary departments."

He blames the fashion on the remarkable ability of the French to sell their intellectuals to the world: "This is fine if it is someone like Camus or Levi-Strauss, although I don't understand everything he writes. But when it is Lacan or Derrida it is disastrous. It is totally different to Britain, where intellectuals are detached figures. If Isaiah Berlin, with his ability to communicate difficult ideas with incredible clarity, had gone to France instead of Britain he would be read by millions and be known all round the world."

Read by millions and known all round the world. Not a bad description of Vargas Llosa himself.

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Death in the Andes and Making Waves are both published by Faber at Pounds 15.99 and Pounds 20.00 respectively.