To say that Alice Munro inspires devotion among her readers is more than cliche: for Jonathan Franzen she is “the Great One”, for Margaret Atwood “an international literary saint”, for the New Yorker magazine, where her stories have appeared since the 1970s, she is “our blessing”. After years of consternation as to “why her excellence so dismayingly exceeds her fame”, as Franzen put it in an impassioned piece in the New York Times in 2004, this week her followers can finally be satisfied: Munro is Nobel Laureate for Literature. Her daughter Jenny will travel to Sweden to attend the ceremony on her behalf because Munro, now 82, is not well enough to make the journey herself. She is the 13th woman and the second Canadian (if you count Saul Bellow, who emigrated when he was nine) to have been awarded the prize. “We had to wait more than a century, but we finally have a Nobel for a pure short-story writer,” says Franzen.

“I don’t think I can write any more. Two or three years from now, I will be too old, I will be too tired,” Munro said when I interviewed her after the publication of The View from Castle Rock in 2006. “How much of my life have I spent going along this road, what else could I have been doing, and how much energy have I been taking from other things? It is very weird to think this now, because my children are older they don’t need me around, and yet I feel somehow that I’ve only lived one part of this life and there’s another part that I haven’t lived.”

She may not have kept her resolution not to write again, but she has for the most part, even in the post-Nobel commotion, kept her promise not to do any more publicity. In July this year she formally announced her retirement (although a brief broadcast on Canadian television after the Nobel announcement teasingly hinted she might be tempted to write again). Her health is clearly an issue. When her long-term Canadian editor, Douglas Gibson, received her 2012 collection, Dear Life, he says she told him this would be her last book and he felt that she meant it this time. It includes a coda to the four final stories: “I believe they are the first and last – and the closest – things I have to say about my own life.”

It was around this time of year that we met in the small town of Goderich, near Lake Huron where she has lived nearly all her life – the landscape of which, and whose inhabitants she has depicted with what Franzen called “almost pathological empathy”. We had lunch at Bailey’s Fine Dining, where she would take editors and visiting journalists (and have lunch every Monday with her friend Emily). We sat at her regular table by the bar as she chatted generously about books, writing (she was keen for London literary gossip) and her life story. A 1930s soundtrack added to the nostalgic feel of the place, but at times threatened to drown out her light, confiding voice on my recording. When the waitress finished tidying up, she produced a key from her handbag with a fairy godmother twinkle. “I turn the lights out and lock up, I’ve been coming here so long.” We carried on talking as the Southern Ontario sky grew even darker outside, eking out glasses of white wine with mineral water. Her husband Gerry – a tall man in a red lumberjack shirt – came to collect her, and she dispatched him to wait outside and listen to Swan Lake in his truck until we finally finished: “Don’t worry, he loves his music.”

On Sunday 21 August 2011 a tornado tore through Goderich demolishing several of the old buildings on the square. Bailey’s was one of the worst hit. “A case of divine disapproval,” Munro quipped. Gerry died in April this year. A freak accident, personal tragedy, even the tiny flourish of “fine dining” – all might come from the pages of a Munro story. The same is true of the long delay (for various logistical reasons) from my interview to its appearance on the page. As Munro herself has said: “I like gaps, all my stories have gaps. It seems this is the way people’s lives present themselves.”

“In many ways I’ve been writing personal stories all my life,” she said in Bailey’s. If you are a Munro fan, you will know about the struggling mink and fox farm of her Depression-era childhood; the family’s house at the end of the road; the burden of her mother’s Parkinson’s disease in her early 40s; her scholarship to university; her early marriage to a bookish student, young motherhood and divorce. And you will recognise the watermarks of shame and guilt running through each collection: “I was brought up in a community where there was shame,” she says of her Scots-Irish Presbyterian rural upbringing. “We say of some things that they can’t be forgiven, or that we will never forgive ourselves,” she writes in the last line of Dear Life about her failure to visit her mother during her last illness or even to go to her funeral. “But we do,” she continues with characteristic insistence on absolute truthfulness – “we do it all the time.”

She says her feelings about her mother are “probably the deepest material of my life. I think when you are growing up you have to pull apart from what your mother wants or needs, you’ve got to go your own way, and that’s what I did. And of course she was in a very vulnerable position, which in a way was also a position of power. So that was always a central thing in my life – that I did pull away from her when she was deeply in need. And yet I still feel I did it for salvation.”

Her mother’s illness meant that Munro took over the housework and care of her younger brother and sister from when she was around nine. “I wanted the house always to be clean. I would bake on Saturdays and I would iron everybody’s clothes. It was a way of keeping up respectability. Superficially I was very kind to my mother, but I never allowed myself to enter into her predicament or I would have stayed and become the person who ran the family until she died and then it would have been too late for me to go.”

Munro, at home with her daughter Sheila in North Vancouver, in 1954Munro speaks often in terms of escape, hiding and disguise: she was already finding her first form of escape through reading and writing, albeit only in her head. For ages, she didn’t write anything down because she “was worried it would be so disillusioning, or bad,” that she would quit.

After rewriting “The Little Mermaid” to give it a happier ending, she progressed to a Wuthering Heights “offspring” (“There must be an awful lot of them around”). She loved the way the landscape was part of the story, and knew this was the kind of book she wanted to write. “My Wuthering Heights was a very recognisable Canada, and I grafted on Yorkshire.” Despite not having looked at Emily Brontë’s novel for more than 40 years, she can still quote whole passages, and in a telling clue to the angle from which she approaches a story, she muses: “Everybody thinks they would be Cathy, the woman Heathcliff loved, not Isabella, the woman he married, don’t they?”

Munro’s mother, a former teacher, is a domineering, dissatisfied creature stalking her fiction. Her father, although not averse to giving his children a beating, presents a more sympathetic figure; he was “addicted to books”, reading every Sunday afternoon, and even publishing his own in his retirement.

Although her childhood was harsh, Munro insists it was not particularly unhappy; “there was this private world” of writing and the imagination to which she could always retreat. “One is lucky to be born in a place where no one is doing it because then you can say, well obviously I can write better than everyone else in high school. You have no idea of the competition.” She and her friend Atwood “have a theory” to account for the strong generation of Canadian women writers to which they belong (Carol Shields, before her death in 2003, was another friend); it would have been unthinkable for young boys in rural Canada at that time to have been bookish as “the limits of masculinity were pretty narrow”. Whereas many women, such as Munro’s mother and Munro herself, were encouraged to be educated to become teachers: “So when women started writing novels it was quite OK in Canada, not that the men were going to read your novels, by no means.”

But back when she was growing up “the worst thing you could do was draw attention to yourself”, so she kept quiet about her ambitions. She won a scholarship to the University of Western Ontario, then almost unheard of for a girl from her hometown of Wingham. In the first of her “periods of disguise” she enrolled on a journalism course and passed two happy years in “a hide-out” from the drudgery of home. Not for Munro the dashing escape to Paris like fellow Canadian short-story writer Mavis Gallant, 10 years her senior and from a more sophisticated background. “To live in a place like Wingham you have a very narrow opportunity to get out,” she says. “If you wait until you are 30 you become too timid and know too little about the world and it never happens. So I got out. I got married and it was a very lucky thing.”

Such steely pragmatism should not surprise readers of Munro’s stories. In “The Beggar’s Maid”, for example, Rose agrees to marry the priggish but privileged Patrick, “because it did not seem likely such an offer would come her way again”. In those days, Munro says, “if you weren’t married at 25 you were a failure. I had the feeling from my high-school experience that I was not everybody’s cup of tea. And I thought, well somebody likes me – a miracle.”

As the narrator remarks of Juliet in “Chance”, one in a trio of what she has called particularly autobiographical stories: “The problem was that she was a girl. If she got married – which might happen, as she was not bad-looking for a scholarship girl, not bad-looking at all – she would waste all her hard work and theirs, and if she did not get married she would probably become bleak and isolated, losing out on promotions to men.”

She was 20 when she married Jim Munro, who was a manager of the department store Eaton’s. The couple set up home in North Vancouver, and she had three daughters by the time she was 26. Her second child, Catherine, died when she was only two days old. A fourth, Andrea, was born nine years later. “So I was a bit clipped in my 20s,” she says with typical understatement. But she read “every European novel that you were supposed to have read”, as well as the southern gothic writers – Eudora Welty, Flannery O’Connor, Carson McCullers – whose influence can be seen so clearly in her work. She was also stealing every moment – the children’s “naps were very important” – in which to write. In her daughter’s memoir, Lives of Mothers & Daughters, Sheila Munro recalls how her mother wrote “in a laundry room, and her typewriter was surrounded by a washer, a dryer and an ironing board. In fact she could write almost anywhere in the house.” The scene is almost like a cartoon to illustrate the “domestic stories” label Munro has had tied around her neck like an apron string (this phrase headlined a New York Times review as late as 1983). In 1961, after she had published a few stories in small magazines and had them broadcast on the radio, the Vancouver Sun ran a piece about her: “Housewife finds time to write short stories.”

In 1963 the family moved to Victoria on Vancouver Island, where Jim Munro opened Munro’s Book Store (the 50th anniversary celebrations of which happily coincided with the Nobel announcement). Although she later credited “being a housewife” and not having to worry about a job for making it possible for her to write, she recalls seeing Betty Friedan’s The Feminine Mystique in a shop when it was first published and being afraid to read it because it was “about giving up and I was at a stage that I was afraid that I had given up because I hadn’t published anything and that was when I fell into depression.”

This sense of suffocation manifested itself in physical symptoms: “I can’t breathe, I can’t breathe, I’ve got to take a tranquilliser,” she says, vividly recalling the sensations in the calm of Bailey’s. For about two years, she “would write part of a sentence and then would have to stop. I had simply lost hope, lost faith in myself. Maybe it was just something I had to go through. I guess it was because I still wanted to do something great – great the way men do.”

Munro in the early 1980s. Photograph: Kriston RossBy “great” she means writing a novel. “I was trying and trying and trying to write a novel – and it never worked. After even my second and third and fourth books my publishers still hoped I would write a novel – I felt I was wasting my time.” The morning we met she had just read a review of a short novel in the New Yorker and wondered “how short?” At one point, says her agent Virginia Barber, who long ago stopped asking for a novel, “her stories got so long, we almost made it”.

Is she still sad she hasn’t written a novel? “Yes, I’m sad that I haven’t written a lot of things, but I’m incredibly happy that I’ve written as much as I have. Because there was a point when I was younger where there was a very good chance that I wouldn’t write anything – I was just too frightened.”

In 1968 Munro published her first collection, The Dance of the Happy Shades, which included all the stories she had written in the last 15 years. (The title story made Atwood cry because “it was so good”.) One Sunday afternoon the following year Jim, who “felt that something good in me was being wasted”, sent her off to the bookshop to write with the promise that he would make supper. “Now getting supper was not his strong point – he made meatballs, good meatballs, but that was the only thing he knew how to make – but nevertheless he did and I went down to the store. It was very difficult at first because I was surrounded by all these books, books put you off writing terribly – but I was able to ignore it.” The result was Lives of Girls and Women, often described as her one novel, a coming‑of-age narrative, but which she calls “really just a collection of linked stories”.

She credits the discovery of Edna O’Brien and William Maxwell for helping her break through her block. Maxwell gave her leave to write “about family and about one’s own background, over and over again, and never mind what people say, learning more and more about it. He said once that he had all the material he needed when he was eight years old, because his mother died then.”

In O’Brien she recognised “the pain of the love” with her mother, and a similarly stultifying community in Catholic Ireland, “something about that life on the outskirts of the British Empire, speaking the language, but not being quite part of that world.” Being inspired by O’Brien, she says, “is much more comfortable than being inspired by Wuthering Heights – it’s the real world”.

O’Brien also gave her the courage to write about sex. Anyone who knows Munro only by reputation – all those small-town spinsters and unhappy mothers – might be surprised to know how good she is on sex. “Falling in love, falling in lust, sneaking around on spouses and enjoying it, telling sexual lies, doing shameful things they feel compelled to do out of irresistible desire, making sexual calculations based on social desperation – few writers have explored such processes more thoroughly and more ruthlessly,” writes Atwood. Writing about female sexuality, Munro says, “you are doing something that nobody will be proud of you for. When you are writing you feel a necessity to go as far as you can. You feel wrong, but still not sorry.”

Then came the 70s, and the rule books that teenagers in the postwar years such as O’Brien and Munro had been rebelling against were torn up overnight by a younger generation. But it didn’t mean those women who had become good 1950s housewives when they were barely into their 20s weren’t touched by the restlessness: “We were just young enough, in our late 30s, that our lives weren’t really over. There was this upheaval, for men as well as women. People began to have affairs, thinking that life could be much better or different.” In 1973 the Munros’ marriage was one of the many casualties of the new mood. “It was the thing to do,” she says gaily.

She had a little money in the bank and a third book due out, but for the first time in her life she had to think about making a living, so she accepted a job teaching creative writing at York University in Toronto. She only lasted until Christmas, because she “was absolutely no good at it. I couldn’t stand it.” Teaching may have been a disaster, but moving back to Southern Ontario sparked a turning point for Munro personally and professionally. In a narrative twist that might have come straight out of one of her own stories she met up with Gerry Fremlin, who had been an editor on the student magazine when she was at university and the first person to whom she had submitted her work. He wrote her a fan letter – in which he was the first to compare her to Chekhov – but for once she was disappointed that he was only admiring her writing. He looked her up in Ontario and “three martinis later”, as she tells it, they were very much together.

At the end of Lives of Girls and Women is a much-quoted and in hindsight prophetic passage that begins: “People’s lives, in Jubilee as elsewhere, were dull, simple, amazing, unfathomable – deep caves paved with kitchen linoleum. It did not occur to me then that one day I would be so greedy for Jubilee.” More than 20 years after her escape from Wingham, she moved to Clinton, another small town within 20 miles of those “deep caves paved with kitchen linoleum” of her childhood, to live with Gerry in the house where he was born, because his elderly mother was ill.

From this point on, “she just poured her life into her stories”, says Gibson, who signed her up in 1976 and has been her editor ever since. “When she came home she discovered that this was her world and the world that was going to inform her writing for the rest of her life.”

“I love this landscape. I just do,” she tells me. Gerry, a geographer, helped her appreciate it in new ways. “I began to remember more things that had happened here and I think I began to write harsher stories.” Her stories became less personal, her prose simpler, while the narratives became longer and more complex. Virginia “Ginger” Barber became her agent in the late 70s and started to sell her stories to the New Yorker. The first they published were “The Beggar Maid” and “Royal Beatings”. Now Munro has become such a fixture that a couple of dissenting critics have referred to them slightly sneeringly “as classic New Yorker-style short stories”, popular with metropolitan readers “wondering what it was like living out in the sticks”. Over the years, Barber observed how her themes grew broader: “You don’t have such emphasis on the mother-daughter relationship, there is romantic love and its complications, there are children. As her life changed her stories changed to reflect some of that. Not necessarily autobiographically, but in circumstances.” Collections have appeared regularly every three or four years, now totalling 14.

Barber was also responsible for Munro being published in the UK. Carmen Callil was thrilled to have Munro as one of her first signings on joining Chatto from Virago in 1982: “Ginger said to me, ‘I have a wonderful present for you, the greatest writer I have’ – and it was Alice Munro.”

The morning we meet, Munro says she has been worrying about a story that is soon to be published in Harper’s magazine, because she thinks the “segments” are in the wrong order, so much so she’s been wanting to write to Harper’s and ask for it back. Gibson says she has “an unusual style of going from A to M, then J back to C and then on to Z. And then magically it all comes together and makes perfect sense.” He sees his main role as “wrestling every story away from her so we can publish it”. She doesn’t even have a room of her own, he says, working instead at a narrow, suitably unfussy wooden desk in the corner of the main room (“Gerry would be making a sandwich in the background”). “There is a wonderful spot on the second floor of her house,” observes her American editor, Ann Close, “where she can look out over her backyard, across railroad tracks, to the fields beyond, which is where she drafts many of her stories.”

Barber would never call before 11am, as she knew that was her writing time. She has a prized photograph, which came with one of the manuscripts in the mail, in which Munro is sitting upright on the sofa in her nightgown, hair uncombed, writing in a notebook on her lap. She writes everything by hand “just the way it comes to me and then I rearrange, and rewrite and rewrite. It might take me six months at least. It might even take me a year. I will be going over it and over it.” She works on some stories for years, often they look back to the past, many set as long ago as the 60s and 70s because “that was the most turbulent and interesting time I lived through on a personal level”. When I ask her if she is always looking at people, wondering about their lives and histories, she gives a firm no. “I’ve always got enough material. I’ve always got a backlog.” She is, however, concerned about not keeping up with the times, not in terms of “stuffing” her work with modern things (a mobile phone made a first appearance in one of her stories only recently), but in truly inhabiting her characters. “How can I go on writing if I know so little? Because I really know very little about the life of most people under 30 today. I have an idea of what their lives are like sexually, but not a very clear idea.”

Both her stories and her conversation worry away at the limitations imposed on women. “Many people ask me why have you not wanted to widen your canvas, it’s so narrow, it’s all set in this place where you grew up. They don’t say ‘feminine’, nobody would say that – but it’s … ‘personal’. And this is seen as something that I might have gone beyond. I think that’s a lot of crap, but I can still wonder … why didn’t I?”

She won’t make excuses about writing in the limited bursts of time available to a mother; short stories are just what she does – although she thinks it may have something to do with knowing she will always be able to finish what she starts.

Why is her work so loved?

“Maybe I write stories that people get very involved in, maybe it is the complexity and the lives presented in them. I hope they are a good read. I hope they move people. When I like a story it’s because it does something,” she clutches her fist to her heart, “a blow to the chest.” Her description of the effect of Chekhov’s “Lady with the Dog” perfectly describes that of her own – the mood of the story gets into your bones.

“This is a wonderful thing for me, and a wonderful thing for the short story,” she told the Nobel foundation after the prize was announced in October. Short stories are “often brushed off as something people do before they write a novel … I would like them to come to the fore without any strings attached.”