A band of Neil Gaiman’s devoted followers – 1,000 of them – filled the Peacock Theatre, London to capacity: the biggest RSL turnout ever. Gaiman was greeted like a rock star when he arrived on stage to talk about his new book, The Ocean at the End of the Lane.

The book had begun ‘accidentally’. His wife, the singer Amanda Palmer, had gone off to Melbourne to record a new album. Alone and missing her, he wrote a short story to send to her. But it soon grew in to a novelette, then a novella, and finally a full-scale book.

The story hinges on a car. In 2003 Gaiman bought himself a Mini; when he told his father, the latter recalled that he too had owned one when Neil was a child. At the time they had a lodger staying with them in East Sussex – an émigré from South Africa, who had smuggled out all his money, plus that of some friends. The lodger soon discovered a casino in nearby Brighton, and proceeded to lose the lot. Returning to the Gaimans’, he drove their Mini to the end of their lane and killed himself. Neil’s book uses this story and looks at these events from the perspective of his contemporaries – children living in a world inhabited by giants, with few instruction manuals to aid them.

At the end of the Gaimans’ lane was a farm which dated back to Domesday Book. Gaiman makes the family who live there, the Hemstocks, key characters in the book, also dating back 1,000 years: their duck pond is the ocean they crossed to get there, and their mother still remembers the Big Bang. Here, as usual, Gaiman interweaves fact, fantasy and mythology. Myths have always been important to him: one of the first books to spark his imagination as a child was Roger Lancelyn Green’s Myths of the Norsemen.

The Guardian was the media sponsor for the event and its literary editor, Claire Armistead, interviewed Gaiman on stage, linking up with the newspaper’s own live blog. A questioner asked Gaiman about his ‘cross-genre’ writing. As a young journalist, he said, he had often interviewed established authors, who usually had a book tucked away that their normal publishers wouldn’t publish; anxious not to end up in the same situation, he took No√´l Coward’s remark ‘Never pop out of the same hole twice’ as his mantra. His recent phenomenal success had allowed him to choose what to write.

Publishers, however, can be obtuse. After the runaway success of American Gods, a different publisher tried to woo him away from Headline, promising greater commercial success and a defined career path, hoping he would write American Gods I, II and III. It was, he said, ‘my idea of hell’.

Gaiman showed himself to be an engaging, fluent and responsive talker, much appreciated by his audience. His lively imagination and sense of humour stood out. Asked about possible future projects, he mentioned an interactive book that might include a string quartet.

Earlier in the day the event’s media partner, the Guardian, had instituted a short-story competition on its website, to which Gaiman contributed the first sentence; readers then competed to finish it. It caught on so successfully that the website quickly crashed – a typical Neil Gaiman moment.

John Clay is a biographer who is currently writing his own memoirs.

Meeting was on 17 June 2013.