The White People and other Weird Stories, By Arthur Machen

Ghost stories are as much a part of Christmas as freezing fog and fortified wine. While not as well-known as masters of the genre such as MR James or Algernon Blackwood, Arthur Machen's remain among the most brilliant and disquieting tales of the supernatural.

What is special about Machen, born in Wales in 1863 and a resident of Grub Street for many years, is his acute eye for London across all its classes and territories and tribes. He moves from Mayfair to Soho, the Strand, Fitzrovia and way beyond, to Harlesden and Hackney and Acton, north and east of Gray's Inn Road, even to grim Freezywater near Enfield Lock, as mentioned in The London Adventure - his stunning piece of Edwardian post-modernism about considering writing a book about London which is never quite delivered.

This is a writer who understood the psychogeography of the capital long before Iain Sinclair. You won't find a finer insight into the street life of greater London at the turn of the Victorian and Edwardian eras. For this alone, The White People is a valuable addition to the Penguin Classics series. It comes with a foreword from film director Guillermo Del Toro, whose own work clearly owes a debt to the Welsh master. Machen has never fallen out of print, but he's hard to find; occulted, a stoppered vial of heady scent around which a cult has grown like dark ivy.

Machen was a bestseller in his day, a member of the Golden Dawn, and intimately acquainted with the spiritualism, occultism, mediumship and excesses of the Decadent era. The Great God Pan (strangely omitted from this collection) and The Three Imposters were published in the 1890s, shocking society, and attracting invitations to lunch from Oscar Wilde.

Machen had already lived in London more than a decade, as he plied a trade as a freelance writer, translating Casanova and writing an essay on tobacco, before an inheritance allowed him to write what he fancied. Aubrey Beardsley and, later, Austin Osman Spare illustrated his works. But Wilde's 1895 imprisonment turned the moral tide against Machen's tales of supernatural horror. It wasn't until the 1920s that his books began selling in large quantities. Alas, Machen had sold the rights decades before. TS Eliot was among those who secured him a Civil List pension against the poverty of his later years.

His great stories, and the key works in this collection, date from the Decadent 1890s. The haunted, hallucinogenic mix of spell workings, witchcraft and disguised sex magic in "The White People" was hailed by HP Lovecraft as the second greatest horror story ever written (after Blackwood's "The Willows"), and it bears the imprint of one who believed in the "wild improbability" of what he wrote.

There are two excerpts from the stunning Three Imposters, an episodic novel constructed with all the ingenuity of a Chinese box. "The Novel of the White Powder" charts the fate of a studious young man whose demeanor changes radically after a prescription of crystal flake; while the gripping unraveling of reason in "The Novel of the Black Seal" spins out an extravagant tale of supernatural terror from an amalgam of ancient alphabets, magical workings, Victorian science and fairy lore.

Ah yes, fairy lore – a byword for delusional fantasies these days. But when Stephen Hawking recently described god and faith as "fairy tales for people afraid of the dark", he forgot that those tales are told to make us fear the dark, not escape it. They are instructive, not comforting. There is an instructive quality of perception in Machen. He makes you see differently, further and closer; he is otherworldly, and unashamedly so, but more rooted in the evocation of place and actuality than many a diehard secular realist.

Readers drawn to the nameless terrors and exultations of Machen should immediately avail themselves of The Three Imposters from the Chaosium press, which contains the full text, as well as The Great God Pan. Perhaps they may find themselves, as Machen did, walking the streets of the capital, turning the loam of their imagination over to happenstance, coincidence, illumination, inevitability - the supernatural forces of the everyday that Machen saw more clearly than most, poised to spring open like a razor at any moment.

Tim Cumming's new collection, 'The Rapture', is published by Salt