''I wanted to look back from a distance at my childhood. This is probably the least autobiographical book I've written in terms of the characters, but I've tried to create a sense of what it was like here in the 1940s. At my age you realise you are living in a different world from the one you grew up in.''

Koch is speaking to me by phone, even though we are both in Tasmania - he's at home in the historic village of Richmond and I'm at a hotel in Hobart, where his publisher has gathered a crowd to celebrate the launch of Lost Voices. It wasn't meant to be this way, but Koch recently had surgery and is still too unwell to attend his own party. Instead, he submits generously to a day of telephone interviews.

There's an elegiac tone to Lost Voices, a hefty double narrative that begins and ends as a fictional memoir of Hugh Dixon, an aspiring artist in the 1950s, and in the middle looks back a century to the story of Hugh's great-grandfather, Martin Dixon, the bored son of a wealthy farming family who ran away to join a utopian community of bushrangers. The link between them is Martin's grandson, Walter, an elderly lawyer who lives alone in the family farmhouse and through Hugh seems to consummate his father's dreams and make amends for his regrets.

Koch has achieved the two-part structure and past-present resonance he tried with Highways to a War and Out of Ireland, which were meant to be one volume titled Beware of the Past, but grew too large.

In Lost Voices, ''every character in the 19th century has a counterpart in the 20th century''. In life, Koch says, ''things that happen in the past have counterparts in the present. We have ancestral memories - it sounds a bit far out but so many Australians go to Europe to the places of their ancestors and recognise those places.'' Koch himself remembers travelling through Switzerland and feeling that he'd been in a particular valley before.

He also cites scientific research into animal memory. ''Chickens run from the shadow of the hawk and they have never seen a hawk; certain memory circuits are inherited from the mother. If animals have this, why should it not be stronger in humans?''

Like his character Hugh, Koch at 17 did a short stint as a press artist with the Mercury in Hobart. But he says, ''I was completely devoted to reading and books from the age of seven. It took until I was 18 to have the confidence to write poetry.''

An English teacher fostered his love of poetry and a first job in a bookshop at 15 introduced him to the classics. His first poems were published in The Bulletin while he was at school and he began a novel at university. After graduation he went to the mainland to join the ABC as a cadet journalist and from there to India and London, where he took jobs as a waiter and a teacher while finishing the novel. Before returning to Australia he left it with an agent who sold it to a British publisher.

''Australians didn't publish in England, except White and Stow, who got started about the same time I did, so it was quite a big thing,'' he says.

Good reviews in London for The Boys in the Island (1958) helped launch his career. Koch worked for a decade as a radio producer for the ABC and left to write full-time in 1972. Several of his books are set in Asia, where he lived for a time; most famously The Year of Living Dangerously (1978), partly based on his brother's experiences and filmed by Peter Weir with Mel Gibson as the Australian correspondent caught up in the 1965 overthrow of Indonesia's president Sukarno.

Koch has returned to Tasmania several times in person and in fiction, drawn mostly by the landscape. There were six years in Launceston in the '70s with his first wife and son, and another four years in the early '90s. Graham Greene wrote of The Doubleman (1985), ''Koch has an extraordinary power of evoking place, and I feel now that Tasmania is part of my memory''. That novel and Highways to a War (1995), set mainly in Cambodia, won him Miles Franklin awards and in 1995 he was made an Officer of the Order of Australia.

After many years in Sydney, Koch and his second wife, Robin, decided eight years ago that even leafy, north-shore Wahroonga was oppressive. There was also ''economic necessity. There's no pension for old writers''. They moved to a modern house outside Georgian Richmond, where he has planted more than 40 trees and looks out to the river and hills he describes intimately in Lost Voices.

Beyond the physical there is also a metaphysical and moral landscape, another of Koch's abiding interests. The utopia in the mountains is the fictional vision of Lucas Wilson, a charismatic and disillusioned ex-soldier, who had been transported for punching an officer.

In Van Diemen's Land he believes he can create a Rousseauian life that turns from the ills of civilisation back to nature and self-sufficiency. However, the men live by raiding farms and Wilson keeps order with a gun.

''It's an idea I believe doesn't work,'' Koch says, likening Wilson's utopia to 20th-century communism and hippie communes. At university, Koch embraced anarchism, wanting the abolition of money and the state for a society that shared everything. ''But it is inevitable that it ends up being a dictatorship. Anarchism was never put into practice except in Spain and the Communists destroyed them … I gave it up by the time I was about 23.''

As a Catholic, Koch believes in the existence of evil, which is represented in the novel by two characters: the escaped convict Roy Griffin and the commercial artist Max Fell. ''I think it's quite rare,'' he says. ''Major criminals, even murderers, are not evil; they're human beings gone wrong for a variety of reasons. But it's difficult for people who don't believe in evil to explain Charles Manson or the Moors murders.''

On the other hand, he says, ''I don't believe novels should carry an obvious message. I don't want to write characters you can immediately say are good or bad; as in life, most people are a mixture.'' He admires and tries to emulate Dostoyevsky's ability to create sympathy for even the most degenerate characters.

Lost Voices is dedicated to Frank Devine, the former editor and columnist for The Australian who was one of Koch's conservative inner circle until his death three years ago.

Another close friend, the poet Jamie Grant, launches Lost Voices at Hobart's Henry Jones Art Hotel the evening after my interview with Koch. He makes the claim that Koch is ''Australia's finest living writer of fiction'', on grounds of plot, structure, characterisation, dialogue, depth of content and prose style. ''Each of these elements is polished to the highest degree… No one matches Koch for elegance, clarity and rhythmic effect.''

Grant is married to Koch's literary agent, Margaret Connolly, and edits his books. His only influence on Lost Voices, he says half-jokingly, was to persuade Koch to remove the phrase ''two-humped Mount Direction'', which has appeared before in his descriptions of Tasmania.

Koch is sometimes described as a traditional or even old-fashioned writer, though he is more idiosyncratic than that. He has been a public critic of deconstructionism, which he says ''has had its day''. Still he says, ''I think the novel is in a sort of decline, with some exceptions. Cormac McCarthy is extraordinary - one of very few who deal with plot and character. Richard Ford writes very well. There's a tendency in a lot of contemporary novelists to sensationalise - they open with a weird or contentious scene and you know it's done for effect.''

After a long and celebrated career, is he satisfied with his achievements? ''We would all like to be more successful than we are. I would like to be a major figure in America and Europe, but that's the situation of the Australian writer.''

Koch's new publisher, HarperCollins, is bringing all his books back into print in handsome new editions. And he will keep writing, though as usual he has no inkling of what the next book will be. ''It's all I know how to do. I wouldn't know what to do if I didn't write. As Kenneth Slessor said, writing is a pleasure out of hell.''

Lost Voices is published by HarperCollins, $32.99.

Susan Wyndham travelled to Hobart as a guest of HarperCollins Australia.