Jim O'Rourke: As steady as O'Rourke

The cardigan-clad figure of Jim O'Rourke looks up from his Holiday Inn coffee. "I'm a nightmare," he warns, pointing with a smile to a cluster of Domino records executives: "just ask them." While his affable demeanour renders such a claim improbable, it is worth remembering that this is the man who, after years of critically celebrated but far from chart-busting left-field endeavour, delivered a potential commercial breakthrough (1999's sublimely supple and engaging Eureka), only to insist that it should come packaged in a cartoon image of a naked Japanese man masturbating himself with a cuddly toy. On the cover of his new album, Insignificance, an O'Rourke lookalike in a pink bodice is being given the glad eye by a rubber duck. And let's not even talk about what is happening on the album's inner sleeve.

The artwork may be consistent, but the music kicks off as a real departure. The opening number is a deliciously illicit union of Kylie Minogue's "What Do I Have to Do?" and Lynyrd Skynyrd's "Sweet Home Alabama". Nothing strange about that, you might think; in fact, it's funny that no one ever thought of it before. But when you consider that the song in question is called "All Downhill from Here", and the rebel rocker who made it was, until recently, the closest thing the cloistered world of international improvisation gets to a poster boy, well, it's hard not to think his tongue must be somewhere near his cheek.

O'Rourke got his first guitar at the age of six, and within a couple of years had more or less mastered the oeuvre of Pete Townshend and The Who. Throughout his late teens and early- to mid-twenties, he worked with a roll-call of avant-garde luminaries, including the celebrated British guitarist Derek Bailey, spending up to 20 hours a day splicing together tiny pieces of tape.

His dedication to pushing back musical frontiers was so great that he continued living with his parents in Chicago so that he wouldn't have to worry about anything else, famously inspiring prickly New York improvisational big-wig John Zorn to send him a cheque for a place of his own. But, alongside the inspiring innovations of the various experimental movements with which O'Rourke's name was associated, he began to discern a shocking amount of laziness in the music he was listening to.

"I actually think that, comparatively, there are more bad avant-garde records than pop records," he grins. "Hey, it's not easy to say that stuff's no good, but I'll say it. When you're 16 years old and you've never heard music like that before, it's easy to fall for a cult of personality. I mean, I used to think La Monte Young was amazing, but that was before I'd really listened to anything he'd done. It was part of growing up for me: I started to realise, 'Hey, wait a minute, some of this stuff is crap...'

"Even though," he qualifies, enthusiastically, "it led me on to a lot of other things that did actually blow my mind."

From touring for a year as a member of Sonic Youth, to a more solitary 12 months spent salvaging the comeback album by Kraut-rock legends Faust, along with his stellar production work with the children's choir on Smog's 1999 masterpiece Knock Knock, O'Rourke has cast his musical net far and wide. His name has been most commonly associated with the Chicago "post-rock" scene, an endeavour with which he now claims he "didn't feel that connected". "Most of the people involved were discovering experimental music for the first time," he explains, "whereas I was coming from almost exactly the opposite viewpoint, charging back the other way."

By the mid-1990s, O'Rourke's constant quest for new musical challenges was leading him in some unexpected directions. Gastr Del Sol, his long-running collaboration with erstwhile Squirrel Bait eminence David Grubbs, foundered on the latter's unwillingness to embrace the conventional melodies and chord progressions that his colleague now viewed as exciting, uncharted territory. O'Rourke's desire to sing seems to have been the main bone of contention, and it's hard to think of a parallel for the acclaimed multi-instrumentalist's determination to pick up a microphone: maybe Krzysztof Kieslowski making a comedy about teenage virginity loss, or Lucian Freud painting cats.

Would it be correct to say that, when it came to singing, it was something he didn't want to do, and that he knew people who liked his music wouldn't want him to do, so he had to do it? "Yes," O'Rourke admits thoughtfully, "I think that's fair."

His singing voice is quiet and almost apologetic, a tone which his bracingly misanthropic and occasionally X-rated lyrics more than justify. There's a lovely, lilting tune called "Memory Lane" on the new album, which is built around the toxic couplet: "Those holes in your face/could be used better ways." And "Halfway to a Threeway", a gorgeous, wistful lullaby that O'Rourke released a couple of years back, turns out to contain references to sexual fantasies about people in vegetative states.

Is it important for him to offset the sweetness of his music with something more – it's hard to think of the right word – tangy? "Tangy music with tangy lyrics doesn't interest me," O'Rourke nods, beaming, "There's no tension.

"I can sing better than I do on record," he adds, as a somewhat mystifying afterthought, "but it wouldn't sound like me." As the revelation that some people like his singing seems to make him uneasy, I try to compensate by recalling a conversation with one of O'Rourke's fellow US musicians – Jeff Tweedy, of bittersweet mid-westerners Wilco – who said it drove him crazy.

"He likes my singing now," insists O'Rourke, not sure whether to be outraged or delighted by that slur on his vocal abilities. "We've got our own band together." By the time he's finished describing this intriguing side-project – they're called Nuts (No, really, they are) and a record is already in the can, pending the release of Wilco's eagerly awaited fourth album, which O'Rourke has had a hand in – he's decided to take Tweedy's insult like a man, proclaiming gleefully: "I'm gonna give him some shit for that when I get home."

Watching O'Rourke marshall his all-star band on stage at the South Bank for Scott Walker's Meltdown Festival in the summer of 2000, fear was too simple a word for the complex set of emotional responses he seemed to inspire in them. It comes as no surprise to find out later that they refer to him as "the benevolent dictator". "There are times when I tell them what to play," he confesses, "but I know they'll do it their way, and that's really what I want to hear."

The musicianship on Insignificance is tighter than on Eureka, but every bit as captivating. It's as if O'Rourke's years of immersion in the avant-garde have fine-tuned his ears to the infinite possibilities of pop. If someone had played him the album 10 years ago and told him he'd made it, how does he think he would have reacted?

"I don't think I'd have been surprised, but I'd have wanted to know who the drummers were," he grins. "Those drummers are good."