I've never made a secret of my belief that Bryan Talbot is a genius  if you don't know his brilliant graphic history book, Alice in Sunderland, you should buy it immediately  so I was always going to like Grandville Mon Amour. Even so, my passion for it took me by surprise: I can safely say that this is, by several miles, my favourite graphic novel of the last 12 months. The only problem is: how to describe it? Talbot's work is incredibly rich, resisting easy categorisation by simply not being like anything else. Grandville Mon Amour is, like its predecessor, Grandville, the bastard child of Alan Moore (the Moore of From Hell rather than of Watchmen) and Beatrix Potter, with a dash of Conan Doyle thrown in for good measure. Can you imagine such a thing? I know. It sounds crazy. Somehow, though, it seems to work.

The Grandville series (I really hope it is going to be a series) is inspired by the work of the 19th-century French illustrator Gérard, who worked under the nom de plume JJ Grandville, and the science fiction writer Robida. The books are steampunk thrillers, by which I mean that they are set in what looks very much like Victorian Britain, but with sci-fi and historical twists: its citizens have only recently won their freedom from a French dictatorship and, while they refer to daguerreotypes rather than photographs, and voice pipes rather than telephones, they also fly in skyships and watch the news on television.

Oh, yes: one other thing. They're not people, but animals (Gérard often drew anthropomorphic characters): every kind of animal you can think of. In Grandville Mon Amour, for instance, there is a hippopotamus brothel-keeper, and a star-nosed mole pawnbroker. Human beings  known as "dough-faces"  appear in this topsy-turvy world only rarely.

Our hero is Detective Inspector LeBrock of Scotland Yard, who is a badger. His sidekick is a monocle-wearing rat called Roderick Ratzi. The new book starts soon after where the last one finished. Following a drinking spree, LeBrock has had a huge row with his superior and, in order to redeem himself, sets out to capture his old adversary Mastock the mad dog, a serial killer of prostitutes who has escaped from prison in London and is now terrorising Paris, better known as Grandville. But is Mastock working alone, or he is part of some wider conspiracy? And who is the mysterious walrus who visited each of his most recent victims shortly before their horrible deaths?

Putting this down here, it all sounds a bit silly; perhaps you're wondering whether I am stoned. But, believe me, in Talbot's hands the whole thing is utter bliss: clever, knowing, funny, imaginative, chilling, and illustrated so gorgeously, you could stare at each frame for hours. I love LeBrock, and I want you to love him, too. So, go on. What are you waiting for? Follow the badger!

Bryan Talbot has always specialised in that brand of nostalgic satire known as steampunk. His Luther Arkwright stories were set against the background of a British Empire where uniformed airshipmen fought for queen and country, until discovering their idealism to be a little misplaced  whereupon their adventures continued apace, only with somewhat altered objectives.

In those books Talbot drew heavily on a wide range of English iconography to depict an Albion ruled by monarchy and church. This came in for some stern thrashings through the 1990s as he continued his relentless prosecution of authoritarian power, up until what remains my own favourite, The Tale of One Bad Rat. This moving story of child abuse set pretty much in the here and now referenced, of course, Beatrix Potter.

Talbot's storytelling, as well as his draughtsmanship, has grown steadily more assured and subtle. With his superb graphic novel Grandville, published last year, he extended his range to include references to the mid-19th-century French artist JJ Grandville, best known for his anthropomorphic representations of animals. That said, Talbot's animal characters owe more to British artists such as Tourtel and Bestall, who drew the Rupert stories. Their inhabitants of Nutwood included Percy the Pug, Bill the Badger and Edward the Elephant, all drawn to the same human scale. It's a tradition dating at least from ancient Egypt, which gives us such 20th-century favourites as Tiger Tim, Korky the Cat and, of course, the enduring characters from The Wind in the Willows and Winnie the Pooh. Talbot knowingly chooses to work in a European, predominantly English, tradition. While his narrative clearly invokes pre-entente rivalries and prejudices, referencing Grandville, Fantomas and the incredibly bloody French 60-centimes dreadfuls such as "Le Charcutier Parfumé" or "Agathe La-Goule", Talbot achieves ironic counterpoint by using our old nursery favourites, all grown up.

Rather than quaint rural fantasies, Grandville tells a violent mystery story set in a world where Britain only recently freed herself from a France in which Napoleon won, and we still use French as our first language. In this sequel, Talbot develops ideas explored in his first story, again employing Detective Inspector LeBrock (a badger) and Detective Ratzi (a rat), a pair of relentless coppers.

Although Talbot's narratives lack the complexity or originality of Alan Moore's, he brings a rare subtlety, even beauty, to his medium. His drawing is first class and his dialogue superb, adding credibility to his characterisation while moving the story along at a laconic lick. The tale is set a few years after Britain has won her independence from France, which retains a contempt for her uncouth former colony. In turn the British carry chips on their collective shoulder, having won independence through a mixture of terrorism and political bargaining. Our terrorists, known as The Angry Brigade, are mostly dead, mysteriously betrayed, LeBrock's f ather among them.

One ex-terrorist, Mad-Dog Mastock (yes, a dog), about to be guillotined for the serial murder of women, escapes, killing a jail-full of guards. LeBrock vows to bring in Mastock, whom he arrested for the original crimes. Mastock turns up in Paris, murdering prostitutes apparently at random. LeBrock and Ratzi entrain for the French capital, doing their best to keep a step ahead of the killer while trying to solve the larger mystery behind his escape. This involves various friends and enemies in high places, several of whom are not what they seem.

Talbot's elaborate brass-and-mahogany steampunk paraphernalia constantly add to the visual delights of the tale. If some revelations are predictable, his draughtsmanship more than makes up for it.

For over a century children have loved getting a Rupert or Beano annual as part of the season's largesse. This year a lot of grown-ups should feel similar delight when Grandville Mon Amour turns up under the tree.

Michael Moorcock's Into the Media Web: Non-Fiction 1956-2006 is published by Savoy.