A home fit for a genius: Sir John Soane's Museum

You'd be hard-pressed to guess what single London building completely fascinates Antony Gormley, Vivienne Westwood, Damien Hirst, Stephen Bayley and – let's add an architect, shall we? – Daniel Libeskind.

The answer: Sir John Soane's Museum in Lincoln's Inn Fields, the world's most brilliant conflation of domestic and curatorial spaces. To enter Soane's masterpiece, whose £7m restoration scheme will be announced today, is to walk straight into the mind of a genius.

The public – or "amateurs and students" as Soane described them – have been doing just that since soon after his death in 1837. He established his house as a public museum via an Act of Parliament in 1833 that stipulated that the three buildings that made it up be kept "as nearly as possible in the state in which he shall leave it".

In his lifetime, Soane's reputation as an architect was high, but not ethereally so. His works included Pitzhanger Manor in Ealing, the dining rooms of 10 and 11 Downing Street, country houses, churches, and two buildings of particular importance: Dulwich Picture Gallery, and the Bank of England. Both were extremely innovative, and the latter's destructive remodelling by Sir Herbert Baker was described by the architectural historian Nikolaus Pevsner as "the greatest architectural crime, in the City of London, in the twentieth century."

And so, Soane's home and museum, built between 1792 and 1824, remains his most potent memorial. Yet, for the best part of two centuries, what lay behind the entrance door at number 13 (and numbers 12 and 14 to either side) remained something of a secret, except to architects and cultured individuals. Until about ten years ago, you could walk straight through into the eerily top-lit museum and find no more than a handful of visitors there. Today, you're more likely to have to queue to get in.

The museum and other rooms are laden with hundreds of works of art and historical objects, including the sarcophagus of Seti I, Roman marbles, prints by Hogarth, and paintings by Canaletto and Turner. The museum is the most famous segment of the architecture, but the seductions continue, room after room: the Picture Gallery, with walls composed of folding panels; the domed and mirrored ceiling of the primrose-yellow Breakfast Room; the library, gothic in manner and a rich red; the Monument Court and Monk's Yard, replete with architectural fragments, including chunks of medieval stonework from the Palace of Westminster.

The new scheme, Opening up the Soane, will lead to the full-access restoration of Soane's private rooms, crypt and catacomb, ante-room, Tivoli Recess – currently a lavatory – and a model room; for the first time since 1837, visitors will be able to pore over Soane's 80 historical architectural models, the largest collection of its kind in Britain.

Why is the architecture of this building so important? Because, to this day, it challenges preconceptions about internal perspectives and thresholds, and how different kinds of space, and different kinds of object, can come together. There is something of Alice stepping through the looking-glass about this labyrinth of light and shadow, and its overlapping ground floor spaces in particular: it's like a solidified architectural pipe-dream, a poem composed of solids and voids, surfaces and shadows, that shouldn't scan – and yet do.

The visual and spatial effects created by Soane are uniquely, and very beautifully, provocative. As Ptolemy Dean, an authority on the museum, says: "It's this 3D quality, this seeing through things, that's so fabulous. Soane was forced to design on an existing plot – that's the brilliance of it, the architectural planning, the resolving of even the smallest spaces."

Even the eminent architectural historian Dan Cruickshank was lost for words when I challenged him to think of another domestic-scale building that was as significant as the Soane Museum. There was a distinct pause, and then: "Yes, that's difficult, isn't it?"

There might just be one tenuous, and highly debatable, competitor to the Soane Museum as a domestically scaled architectural masterwork from the blue. The extraordinary Villa Muller in Prague, designed by Adolf Loos in the late 1920s, takes ideas about spatial layering to the very limit: one can stand in the living room and see into parts of rooms on four other levels in the house – and each room possesses a different character.

Not that the ebullient Cruickshank ever pauses for long, of course. "It's completely phenomenal," he enthuses. "It's amazing that it was conceived by Soane as a house, a workplace, and as a museum. It's just tremendous – utterly individual and peculiar. It was shocking and inspirational. It is architecture of the highest genius. He reinvented the language of classical architecture. It was so radical that the district surveyor tried to sue him." That won't happen to Julian Harrap and Caruso St John, the architects who will restore and reprogramme the museum. They are cultured and have a great empathy for historic precedent.

Adam Caruso and Peter St John will re-cast four rooms, which will become new exhibition and interpretation galleries. There will be a new entrance sequence, and the obligatory shop. The architects are also designing new furniture, linings, and display units, and the early visuals for them look simultaneously vivid and witty. Their interventions will undoubtedly be deft and deferential; nobody would dare to try to out-Soane Soane.

The architects are absolutely right to emphasise that the museum "is as much about the splendid organisation of light and space as it is about a connoisseur's eye for precious objects". But their desire to create what they describe as a "seamless" mediation between drawings, objects, interpretation, merchandise and rooms is ultimately meaningless. It is precisely the seamed jump-cuts of light, space, objects and ambience that make this place so magical. Memo to all architects: nothing meaningful in life, let alone architecture, is seamless.

"We are delighted to be celebrating, on Valentine's Day, the start of our fantastic programme of restoration and development," says the Soane Museum's director Tim Knox. "It will open up an entire new floor to the public for the first time since Soane's death in 1837, revealing eight idiosyncratically designed spaces, richly furnished and decorated, including Soane's bedroom and bathroom.

"The Museum has kept everything that Soane collected. The project will involve the cleaning, restoration and re-display of hundreds of objects left to the nation. And it will re-create the rooms and spaces that Soane carefully designed to show them at their best."

The buildings will remain open throughout the three-phase project – which is not quite a done deal. A further £500,000 must be raised to complete the final phase in 2014. "Despite the recession," says Knox, "we've had a wonderful response to our fundraising efforts so far. The project really seems to have caught people's imaginations and shows just how much the Soane Museum is loved. We hope our new public appeal will attract many new supporters to raise the final amount required to complete the project."

And so the Soane's existing supporters – they range from Stephen Fry and Michael Palin, to Grayson Perry and Manolo Blahnik – will beat the drums again. Another Soane groupie, the ubiquitous broadcaster Kevin McCloud, is also poised to generate spondulicks. And for once, he really is dealing with a grand design.

Sir John Soane's Museum, London WC2 (www.soane.org)