Terence Davies' new film, Of Time and the City, is exquisite: a poetic paean to his native Liverpool, where the music of Bruckner, the words of T. S. Eliot and James Joyce, and footage of Liverpool in the 1950s combine to create a euphoric rhythm in black and white. And yet, despite the sublime shots of gothic cathedrals, children holding mothers' hands, ferries crossing the river, the film is punctuated with stop-dead lines such as "I will get you in the end," muttered by Satan. Where does such a combination of pessimism and the sublime come from? We asked Terence Davies himself, renowned cineaste of such breathtaking meditations as Death and Transfiguration (1983), Distant Voices, Still Lives (1988), and House of Mirth (2000).

As I say in my film, it is paradise betrayed. I was very, very devout, and I tried to live according to the tenets of the Church: be good in word and deed, which is impossible. When at age 11, I realized I was gay, I prayed until my knees hurt, and I was in deep despair I carried on until I was 22. I thought any doubt was the Devil's work, and you have to resist it. Then I realized it was just a lie. I really touched the nadir, and I thought I could not go on.

I felt it as a child nonetheless, and that was hard. I think it was Nietzsche who said that something that does not kill you makes you stronger, and it does, but at the time you don't know how. The film Victim came out in 1960, and it used the word "homosexual." It was the first time I heard that word. The character said, "I am a homosexual," and I remember thinking, "And so am I." I was terrified. People's lives were ruined for that word. I felt utter terror. It was the nadir of my life: a sexual crisis, a spiritual crisis.

Cinema took over after that. And then the discovery of the music of Bruckner, who was spiritual and sublime, and a devout Catholic. So I channeled my own life into cinema, because (a) being gay was against the law until 1967, and (b) I wasn't attractive. I did not have a good body. Nobody was interested. So I decided my work would be my life. My work became my raison d'etre. It was because of my despair that I decided I have to do something. I thought, I cannot continue in a life that I find aesthetically offensive. Because I don't like the gay world. I find it superficial. Great if you look good, but if you don't, forget it.

It was that despair that made me decide to do something aesthetic. Because art does imply hope. All great art implies hope. I discovered Eliot's Four Quartets, and then when I was in drama school, I discovered the sonnets of Shakespeare. Those two and the music of Bruckner have given me solace, because they are sublime. I listen to Bruckner, and I say I can quite happily die now. I read the Four Quartets once a month. The sonnets are superb and so reassuring. You read something like :

And you know it is true. It is comforting. Because truth in the end is always comforting. Because there is no lie. No fluff. There is no illusion about it.

The Church tries to convince you that there is something after death. It is an utter lie. There is nothing after death. There is nothing beyond the world. There is nothing frightening about that. If there is something, it is okay as long as they speak English.

I am not a documentary filmmaker. They asked me to do a fiction film, and I said no, I have done two fiction films. I would like to make a film about the Liverpool I grew up in. Have you ever seen the film by Humphrey Jennings called Listen to Britain, which was made in 1932, when we were close to being invaded? It is only nineteen minutes, with no words, just images of Britain; it is astonishingly visual, one of the great poems. It is just trying to capture what it is like to be British at war. And I just wanted to capture what it was like to be a Liverputian in the 1950s.

When I was growing up, there was a BBC radio show for mothers and young children called Listen to Mother, and they sing to you. Anyone my age who hears the songs will remember their childhood, with all that tenderness. For my film, we shot some material with just children. The footage has all that tenderness, the magic of childhood, without you saying that.

Liverpool? I loved it. It is the place that made me. I thought there was nothing like it. Especially my street. It was bliss. My film is a farewell to the city. I don't live there anymore. My family is dying. It is not the same. Once it is gone, you can't recapture the magic by going back.

I had written a trailer that already had the architecture of the film. I knew what the journey would be. Then I got a lot of footage. I was writing it as I was getting it. I would think, oh yes, I remember such and such: the Grand National, the horse races. As more and more footage came to me, it gave me more and more ideas. I have to use that shot of the little girl running out! I also used the texts of Eliot and Joyce, plus three poems of my own, and my prose.

My feelings about time are influenced by poetry, especially by T. S. Eliot. Eliot is constantly drawn back to the idea of where it all begins and where does it end. All time is unredeemable, he says. We think time moves from one thing to itself, but it doesn't. Time is outside of us. The act of remembering changes the original experience. He says: "For the roses had the look of flowers that are looked at." You can never capture time.

Is it? It is frightening. Time is unknowable. We don't know what will happen in forty years' time. Where does memory go? Where does all that knowledge that we accumulate go? Virginia Woolf says something similar in The Waves. She writes that man is a judge, that man is a millionaire. But why? The tragedy of that! Another character, very sexual, says she knows she can sit in a chair and say, "Come to me. Come," and he will come. That is tragic.

It is tragic. She knows she has sexual power, but it does not mean a thing. It is knowing that at the peak of ecstasy, it is passing. Even as a child, I knew that it was passing. In two hours it will be gone. My film is about painful nostalgia. The word for it is poignant. Bittersweet.

No.

It made me feel worthwhile, because I hadn't worked for several years.

No. Because you can't stop time. It stops you.