Eliza Carthy has been stirring up English folk music since her début, in 1996. It's no surprise, given her heritage, writes Siobhán Long.

Three nominations for the Mercury music prize, a swathe of albums that contain "more sex and violence than all of Eminem's albums put together", according to one evidently overwhelmed online fan, and three BBC Radio 2 Folk Awards in 2003 alone. Since Heat Light & Sound, her spirited début album, from 1996, Eliza Carthy has been stirring up English folk music like a dervish possessed.

With less than three decades of living tucked under her belt, the Yorkshire-born and now Edinburgh-based singer has wasted little time making her mark. A lineage that is the folk equivalent of the Borgias' has probably contributed somewhat to her career choice. Her parents, Norma Waterson and Martin Carthy, are English folk icons, two musicians who have forged career paths that cross-fertilised everything from Steeleye Span to Paul Simon's borrowing of Martin Carthy's arrangement of Scarborough Fair.

Last week saw Carthy at Farmleigh, in Dublin, for a concert with Micheál Ó Suilleabháin and Mel Mercier, fiddle and vocal cords burnished like brass, and buoyed by a stage personality that would lure the most reluctant of folkies into the fold. Not to mention the lustiest laugh this side of Dorothy Parker.

Despite her regal lineage Carthy never felt her inheritance to be a burden as she set about forging her own career at the age of 17. "My parents have always encouraged me to think of traditional music as a process," she says, "so it was natural for me to acknowledge them, and obviously they're extremely good at what I do too, so they've got a lot of knowledge to offer. Initially, when I turned professional, I didn't want to have my parents on my album, but by the time the second one came around I said sod it, I'll invite them in, and they played under pseudonyms. They chose Cajun names for their appearance on my album Red Rice: Thorngumbold Fontenot and Billericay Fontenot - Thorngumbold is a village outside Hull and Billericay is near London."

Carthy hasn't been afraid to cast her musical net wide, ignoring any preconceptions people might have of the daughter of English folk heroes. Embracing everything from dance programming (on her début) to the big production values of Van Dyke Park on her only Warner Bros release (2000's Angels & Cigarettes), she's equally at home with straight-up folk, as was clear on her most recent offering, 2002's Mercury-nominated Anglicana.

"We've never really seen music in purist terms," she says, including her parents and her aunt and uncle Lal and Mike Waterson in the "we". "We see music as a collection of influences. You can't put your head in a box and ignore what's going on, whether it's traditional music or it's Queen. My parents were always very eclectic in their taste and very open-minded; that's how I feel too."

Having produced albums for herself and for her parents - Waterson's Bright Shiny Morning and Martin Carthy's forthcoming Waiting For Angels - Carthy is becoming far more than a performer.

"I think I approach both [singing and producing\] in the same way," she says. "Of course, it depends what's involved. With my mum's album I was very precious with it, because it was her first solo traditional album, so I really wanted to do a good job for her. I don't think that production is a particularly valued skill in the folk world, but I'm hoping my dad's forthcoming album will stir things up."

For Carthy the thrill comes from taking chances, not from revisiting past victories or recycling old ideas. "I love danger," she declares with an impish grin. "I believe in danger, and so does my dad. I love sticking my neck out, although I hate getting it chopped off. I think the folk scene has a tendency to be quite conservative, and if you're doing the circuit you can forget to be brave. You can forget to try new things. You can forget that folk albums don't necessarily have to be fiddles and accordions and flutes. They can be pianos and oboes and cellos and hurdy-gurdies. They can be anything."

Taking chances doesn't necessarily mean freebasing in the swamps of folk, Carthy is quick to clarify. In order to stray far from the fold you must first of all understand the roots of the music, she says. "If you're going to play any sort of music you have to study the form first. People don't, as a rule. You can't make English crossover music if you don't know what English music sounds like. I would like to hear more unaccompanied singers, and I'd like to hear more of the traditional stuff, so that the contemporary stuff has something to bounce off, so that when you mix your black and white it doesn't become grey."

The role of traditional music can only be strengthened through its integration into academia, believes Carthy, who welcomes Newcastle University's launch of a degree in folk music. "I wish that had been there when I was 17," she says. "Learning not just about the music but about the business as well is a really good thing to do. I launched myself out of the family bosom and flailed around for seven years, working incredibly hard and not having any idea about what I was doing."

With a new album due in February next year (its working title is Anglegrinder), and an arsenal of instruments poised for action, including fiddle, pipes, accordion, piano and guitar), Carthy is bracing herself for a hectic 2005. It will kick off with a joint UK tour with Sharon Shannon and her band. (She has also just started presenting a four-part series on the British folk revival on BBC Radio 2)

Ultimately, Carthy's aim is to make the best music she can, wherever and whenever she can, in spite of the boxes in which musicians are lodged from the get-go. "I was brought up to believe that knowledge was power and music was everything," she says, "and I don't see the logic in a self-imposed ghetto, which is what the music media try to do. Everyone should be able to stand on equal terms and be judged on their merit, not on what they've got stamped on their forehead."