The Daylight Gate, By Jeanette Winterson

Twenty years ago, a former curate at the church I'd attended near Manchester was caught kerb crawling. A parishioner told me. A sensible district nurse, she was adamant that the hapless clergyman was not a victim of lust but of witchcraft. "The police and judges are involved in a coven that operates in south Lancashire," she told me with conviction.

I was reminded of this bizarre assertion as I read Jeannette Winterson's The Daylight Gate, published by Hammer, the book imprint of the revivified horror film studio. For inspiration it draws on the infamous Pendle witch trials, which took place in Lancaster 400 years ago this week and resulted in nine women and two men being hanged for witchcraft on the evidence of nine-year-old Jennet Device, whose entire family were among those executed.

A mash-up of historical fact and fiction that expands the boundaries of horror, the novel should be on solid ground. But the very things that should give The Daylight Gate its strength fundamentally undermine it. Winterson seems unsure if she is writing a literary thriller about bigotry or a Hammer Horror creeper replete with genre love story and orgies. If the former, she fails thanks to dialogue full of clunking exposition about the historical context or clanging modern slang that jolts the reader back into the present day. For instance, magistrate Roger Nowell announces he has ordered "the crew" from the coven to be brought to him. Later, a castrated Jesuit priest wakes up in a brothel, a naked whore beside him. "You want sex or anything?" she asks. Intentionally funny or not, it made me laugh.

As for schlock horror, on this evidence Winterson needs to read more of its masters. Good genre writing relies on telling detail that unnerves the reader, not reminders to readers about which century it's set in. For example, a description of London in 1612 turns into a list of tradespeople with no hint of foreboding. And Thomas Potts, sent by King James to record the trial, merely rants, when description would better underscore the horrific implications of his beliefs.

It is a pity, because the plot is enticing. The heroine is Alice Nutter, one of the hanged witches; a yeoman's widow and suspected Catholic at a time when such sympathies were illegal. A cursory glance at the historical record – notably Potts's contemporaneous account The Wonderfull Discoverie of Witches in the Countie of Lancaster – reveals her as an anomaly among the accused. Whereas they were beggars scratching a living from folk magic and extortion, she was wealthy and middle class. Why would such a woman be caught up with the other accused?

Winterson answers the question by transforming Alice into a beautiful bisexual entrepreneur with a past that involves necromancy, the royal astrologer John Dee and an enigmatic lover, Elizabeth Southern.

A very 21st-century sense of social injustice lies behind Nutter's defence of a group of impoverished tenants, which leads to her entrapment by the devious local magistrate Roger Nowell, whose real quarry is Alice's Jesuit lover, Christopher Southworth, a conspirator in the Gunpowder Plot.

The inclusion of Guy Fawkes's conspirators hints at part of the problem with this slight novel. Winterson picks up too many threads in the story (in this case, that Lancashire was a hotbed of Catholic malcontent) only to put them down after half-hearted consideration. Thus, William Shakespeare makes a fleeting appearance to discuss black masses, Macbeth and The Tempest – a performance of which has all the 17th-century atmosphere of a film screening in Soho. Moreover, the coupling of the castrated Jesuit and Alice is perplexing, especially as such a priest would condemn her as wholeheartedly as her Puritan persecutors.

What is more infuriating is that Winterson can write. And not just on the evidence of her canon, which includes Oranges Are Not the Only Fruit. The Daylight Gate contains some beautifully written passages and set-pieces that hint that she could have delivered a genuinely frightening thriller. At her best, in the wilderness of Pendle Hill or the stinking pit of Lancaster Gaol, Winterson's language is visceral, and she writes unnerving scenes boiling with suspense and impending doom. The squat Malkin Tower, home of Demdike, the 80-year-old leader of the coven, has slits for windows "that looked east and west, north and south, like narrow suspicious eyes". The witch, Mouldheels, arrives "trailing her familiar stink behind her".

But the atmosphere is punctured by a failure to get under her characters' skin or turn them into more than cyphers. As a result, I found myself believing in them as much as I did the district nurse's tale about how witchcraft still haunts the hills of Lancashire. I lost my faith then; now, The Daylight Gate has challenged my faith in its author.