For 30 years David Lynch has been enthralling, alarming, annoying and confounding audiences with his cryptic films. His latest work, Inland Empire, is a partial return to the gritty guerrila film-making of his feature debut, Eraserhead. Donald Clarkepuzzles it out for us

DAVID Lynch has a singular way of uttering the word "no". Venture an interpretation - any interpretation - of one of his films and he will rock slightly backwards before decisively expelling that monosyllable, like a child refusing his bath. "No!'

He will then cautiously admit that such a reading may well be acceptable, but that it must remain one of many solutions, none of which he will explicitly endorse. Fair enough. But has he ever told somebody that any particular explanation of his films is invalid? Some right lunatics must have approached him down through the years. Lynch leans back and purses his mouth in preparation.

"No! It would be wrong to do that," he says. "Getting ideas, even if they are just fragments, is like seeing the film for me. I have to make sense of these things for myself. The viewers are human beings themselves. They are like the receivers and have to figure it out for themselves. When things get abstract, there are many different interpretations. It is more fun to figure it all out for ourselves."

Any sensible admirer of David Lynch's films will surely agree that their appeal is tied up with their narrative obscurity. Were the director to come up with an explanation as to why, exactly, Henry's head gets ground down into pencil rubbers at the end of Eraserhead, Lynch's 1977 feature debut, then that extraordinary picture would suddenly seem a tad less bewitching. Many fans of Twin Peaks, the television series Lynch devised in the early 1990s, were disappointed by the revelation that Laura Palmer actually had a murderer. Solutions do not belong in Lynch projects.

Yet we will insist upon asking Lynch to explain himself. A small group of journalists - traditional cynicism replaced by an undeniable whiff of hero worship - has gathered in Claridge's Hotel to quiz the director on his latest film. Inland Empire (some Lynchians insist the title be rendered in caps as INLAND EMPIRE, but it just looks too horrid) is, if you can believe this, the most obscure feature David Lynch has yet directed.

Shot on naggingly ugly digital video, clocking in at three hours, it stars Laura Dern as an actress whose personality fractures when she begins working on a southern melodrama. Later we find ourselves watching a sitcom featuring monotonic rabbits whose grim pronouncements are greeted by hysterical laughter. One incarnation of Dern ends up being interrogated in a bleak office that may be in Poland. Another (I think) is compelled to act out a shrill domestic drama that has echoes of the film the actress is making. To attempt any further description of the plot would be to waste precious newsprint.

Now here's the thing. Anybody emerging from Inland Empire will surely spend some time seeking solutions and interpretations from their friends. It would, thus, be perverse not to try and get some clarification from the director himself. Don't tell us too much, but what exactly is he up to with the rabbits?

"The rabbit sitcom was on my website at first," he says. "Things start and then they go somewhere else. Where do sitcoms go? They often go on for a long time. I don't know where the rabbits will go. They have a meaning. But the thing is, I really believe in the film and the film is based on an idea. And sometimes you don't know what that idea is. It's a wordless idea."

Sitting through a David Lynch interview is a little like sitting through a David Lynch film. Prone to erratic, puzzling hand gestures, the director constructs long, lovely sentences that rarely do much to answer the question. One's own awareness of the unpleasant images he has conjured up - think of the whimpering baby-thing in Eraserhead - combines with his dignified, polite demeanour to create the same stew of innocence and horror that has characterised such masterpieces as Blue Velvet and Mulholland Dr.

The wide-eyed ingenuousness that the heroes of those films often display is surely connected to Lynch's continuing affection for the 1950s. Inland Empire again features songs and items of technology from that era.

"Well I grew up in the 1950s, so I know what that felt like," he says, puffing on a cigarette. "When you are a certain age those experiences are terribly powerful to you. Some people grew up in the 1970s, which for me is the worst decade, and feel that way about those years. It has something to do with the birth of rock'n'roll. Everyone was driving the sort of gorgeous cars Americans really want. There was just so much optimism, and that must seep into the process."

David Lynch was born in Missoula, Montana in 1946. In the years that followed, his father, a research scientist at the US Department of Agriculture, was forced to transport his family about the country with dizzying frequency. By the time David was 14, he had lived in North Carolina, Idaho, Washington state and Virginia. Yet photographs published in Lynch on Lynch, an invaluable study edited by Chris Rodley, present an appearance of staggering all-American stability. Here he is beneath the Christmas tree with his new trumpet. Here he is, flanked by the rest of the Lynch clan, grinning benignly at the zoo.

The Lynches look like the heroes of some soothingly bland situation comedy but, when Lynch is asked about his recurring dreams, he reveals a continuing anxiety about those early years.

"I used to have one recurring dream where I am in the desert," he says. "And way in the distance I see my father advancing. I know I have a good father and a bad father, but I don't know which is coming towards me. Only when he gets very close I know it is my bad father. I get way up on the roof and I can hear his footsteps below and he can't find me."

Lynch Senior seems to have been admirably supportive of his son's adventures in art. Young David studied painting in Boston before making an abortive attempt to embark on the bohemian life in Europe. After just 15 days abroad, he returned and enrolled in the Pennsylvania Academy of Fine Arts in Philadelphia, where he began experimenting with film. His first few spooky shorts were sufficiently well regarded for him to receive a grant from the American Film Institute to develop a feature.

Eraserhead, the story of a man with a lot of hair, a woman who lives in the radiator and a baby that looks like a cow foetus, took five years to produce. It eventually emerged in 1977 and, after receiving puzzled reviews, slowly built up a ferocious cult following on the midnight movie circuit. It is now quite correctly regarded as one of the greatest of American films.

Inland Empire, made independently over several years with little contribution from investors or producers, marks a return to some of the working practices that were forced on Lynch during the development of Eraserhead.

"With Eraserhead, the idea just came to me and I said wow. Then you fall in love with those ideas and you start translating them. You build sets and get a certain light going and find actors that marry to the characters. It is like staying true to the fundamental notes of a chord. Get them correct and the harmonics will follow. I went to see Eraserhead 19 years later and got more out of it, because I was true to the idea."

I wonder if it is easier to get his own vision across when he is working independently, without financiers lurking over his shoulder. He had a good experience with Dino De Laurentiis on Blue Velvet. But his squabbles with the Italian magnate on Dune, a flabby adaptation of Frank Herbert's fantasy novel, have become the stuff of legend. So do those films made independently contain fewer corrupt translations of the Lynch imagination?

"No, no, no! If you have final cut you can realise the film in any environment. But when you are going with a big crew and working with speed to do it on budget, then that can be more dangerous. When you have time to get the feel of the project it is more enjoyable. You are able to work at a pace that allows some lingering scene by scene."

Though Eraserhead had become something of a scared text by the end of the 1970s, there was still no guarantee that Lynch would have a career in mainstream film. The picture - and its maker - surely belonged in the same bleak cell that contained such experimental film-makers as Maya Deren and Stan Brakhage. Mel Brooks (wearing his producer's hat) thought differently and brought Lynch to England to make The Elephant Man. The picture was nominated for several Oscars and, despite its delicious eccentricity, convinced the moguls that Lynch could work within the industry. George Lucas even suggested he might like to direct Return of the Jedi.

"I had the worst headache in my life even considering Return of the Jedi," he says. "I knew I wasn't right and that George should direct it. [ He didn't.] It's his thing. There was no chance I could do it. I then felt sad I did Dune. It wasn't something I should have done. It was a horror lesson. But fate plays such a huge role in our lives."

On its release in 1984, Dune proved to be a massive financial and critical catastrophe. Fortunately it was followed two years later by the admired Blue Velvet and, his reputation secure as the great American surrealist, Lynch has remained a potent force ever since. There have been a few missteps, but they are invariably followed by the delivery of another sinister classic.

Lost Highway (1997), a fascinating though uncertain film, delighted fans, but left more occasional Lynch-dabblers somewhat underwhelmed. Two years later he veered into coherence with The Straight Story, the tale of an elderly man motoring across country on a lawnmower. The only film on which he does not take a writing credit, The Straight Story is often glibly described as Lynch's least personal film.

"In some ways The Straight Story feels like my most experimental film," he says with characteristic perversity. "I read it and I felt these things. And I thought wow, this is a beautiful feeling. I began to wonder how you get that feeling on screen. You know you often see people cry on screen, but you don't want to cry yourself. So getting that right was an experiment."

In 2001 Lynch faffed around with a failed pilot for a TV show and somehow contrived to turn it into Mulholland Dr, one of the best American films of the decade. On paper Inland Empire and the earlier picture sound quite similar. Both follow an actress as her involvement in a new project does odd things to her psyche. Inland Empire even features a virtual restaging of the astonishing scene in Mulholland Dr where a performer brings worrying intensity to her reading of a script.

The two films are, however, very different beasts. The most obvious distinction is between the gorgeous gloss of Mulholland Dr's 35mm photography and the dusty grain of Inland Empire's low-res digital footage. One appreciates the freedom working with portable cameras brings, but the new film is undeniably less pretty than its predecessor.

"To me, I recognise it's not got the quality of film," Lynch says. "But in some ways less quality is interesting. You look at the image and it's not all there. Sometimes you look at film - and especially high-definition video - and it is all there in the image and there is no room left to dream. Working with low-resolution video reminds me of early film. There was more room to dream. I am so happy with this look. Next time I won't shoot low-resolution, though. I will use whatever the state-of-the-art camera is and I will degrade it to make it look rougher."

Featuring sequences shot in Poland, loose women dancing to the Loco-Motion and an abundance of circular narratives, Inland Empire delights in frustrating any searches for morals or social commentary. But there is surely something being said about Hollywood in the final act. As the credits loom, one version of Laura Dern is seen vomiting blood on the Hollywood Walk of Fame. What does this tell us about Lynch's view of the dream factory?

He sucks on his fag and takes that little lurch backwards.

"Nothing!"

It was foolish of me to ask.

Inland Empireopens today and is reviewed in today's Ticket