It's more than 20 years since Ian McEwan published The Innocent, a tale of a gauche young Englishman failing miserably (and dangerously) as a cold-war spy in Berlin. But I am still haunted by its grim geography  the dark corridors and lifts, the memorably claustrophobic apartment, the protagonist's awkward sexual awakening and, of course, that terrifying evocation of exactly how it might feel to dismember the freshly dead.

McEwan's latest novel may be set in 1972, with the cold war shuffling through its final lacklustre phase, but it could not be more different in tone or intent from The Innocent. Where that novel felt stark and dirty and real, Sweet Tooth is playful, comic, preposterous even. But it's impossible to ignore that its protagonist is a young and fairly gauche English person  female this time  failing miserably (though perhaps not so dangerously) in her job as a spy.

Serena Frome  blond, "rather gorgeous" and "rhymes with plume"  graduates with a third in maths. A speed-reader of novels, she toys at first with an English degree but is persuaded by her mother that it's her "duty as a woman" to grapple instead with numbers. At Cambridge she falls, in an equally dutiful, quasi-somnambulant way, into an affair with a much older, much married history professor and finds herself being groomed for an interview with MI5. When the professor dumps her  literally in a layby off the A45  she is devastated. She starts working for MI5 anyway but is disappointed to find herself doing mere grunt work as junior assistant officer in a "grubby little office" in Curzon Street.

Continuing in her spare time to work her way through the cream of contemporary fiction (in paperback: she can't afford hardbacks) she's startled to find herself summoned upstairs to face a roomful of men: "'We understand you're rather well up on modern writing  literature, novels, that sort of thing  bang up to date on, what's the word contemporary literature... yes, awfully well read and quite in with the scene.'"

Happy to let them think she's "in with the scene", Serena accepts an exciting mission. She is to immerse herself in the work of a young novelist called TH Haley, then meet him and assess whether or not he should be offered the chance of a stipend  "enough to keep a chap from having to do a day job for a year or two, even three". A struggling novelist's dream, in other words.

Codenamed Sweet Tooth, this is MI5's way of covertly recruiting writers and journalists to bang the drum for its own causes. But the recipient must never know where the money is coming from. And, meanwhile, the men upstairs take care to stress that what they're looking for is "the sort who might spare a moment for his hard-pressed fellows in the Eastern bloc... isn't afraid to talk publicly about writers in prison in Castro's Cuba" but that they're emphatically "not interested in the decline of the West, or down with progress or any other modish pessimism".

It's at about this point  admittedly a full third of the way through the novel  that McEwan really starts to have fun, and, as long as you can see through the somewhat dreary, understated, Tinker Tailor-ishness of the spying game, so do you. Serena reads Haley's short stories  which, with their insistent themes of sexual jealousy, obsession and betrayal, resemble McEwan's own early oeuvre  and is entranced.

She then meets the man and, making the age-old reader's mistake of feeling she already knows "one corner of his mind", falls for him. As a flirtatious affair turns into something that feels a lot like love, she becomes less and less comfortable with the enormous lie she's being forced to live.

Meanwhile, Haley, freed from the grind of a day job and able finally to concentrate on his art, manages to produce the most modishly pessimistic novel imaginable, a story of "a journey a man makes with his nine-year-old daughter across a ruined landscape of burned-out villages and small towns where rats, cholera and bubonic plague are constant dangers and neighbours fight to the death for an ancient can of juice". Serena reads it and groans. This is hardly what MI5 had in mind (despite the fact that it pre-empts Cormac McCarthy by some decades). Even worse, an up-and-coming publisher in Bedford Square by the name of Tom Maschler is mad about it and wants to publish straightaway.

And that's just the beginning. This is a great big beautiful Russian doll of a novel, and its construction  deft, tight, exhilaratingly immaculate  is a huge part of its pleasure. There are stories within stories, ideas within ideas, even images within images: a taxi that Serena and Haley take late one night has "on the screen that divided us from the cabbie an advertisement for a taxi like this one".

I admit that, as I continued to read, I was nagged by cavils. Was Serena's rather bluff narration convincingly feminine? Was it amusing or irksome to have Amis père, Amis fils (sharing the stage with Haley while he reads from The Rachel Papers) and Maschler stalking its pages? And did the story really amount to anything more than a clever boy's jeu d'esprit, an in-joke for the already "in" enough literary world?

Well, McEwan answers all these questions (and more) so convincingly, so surprisingly, and with such a sense of joy and relish, that by the end I'd completely changed my mind. In fact, the novel's last few pages, with its delicious (and, you realise, blissfully earned) twist, moved me almost to tears. But you have to hang in there. You have to concede  in the words of a critic who praises Haley's dystopian masterpiece  that you are "in his hands, you know he knows what he is doing and you can trust him".

Because this isn't really a novel about MI5 or the cold war or even  despite the rather obviously ladled-on research about Heath and Wilson and miners' strikes and the IRA  the 70s. This is a novel about writers and writing, about love and trust. But more than that  and perhaps most incisively of all  it's a novel about reading and readers. It's about our own peculiar responses to fiction, to the strange, slippery magic of narrative. It's about how all any of us ever really want from fiction is "my own world, and myself in it, given back to me in artful shapes and accessible form".

Sweet Tooth is a comic novel and a novel of ideas, but, unlike so many of those, it also exerts a keen emotional pull. Its final moment amounts to a question aimed at Serena. And it says a great deal about how vivid and alive she had become and how much I now cared about her that, although I could guess what her answer might be, I really wished I could hear her say it.

A reliable pleasure in Ian McEwan's work has always been the brilliance of his openings. Whether he's aiming for the big set-piece, as in the ballooning scene of Enduring Love, or something more like the casual stealth of the couple's afternoon awakening in The Comfort of Strangers, his tales cast their spells quickly and irresistibly.

One reads him, of course, with the expectation of a story in which something terrible will occur, and that expectation is now a part of the alchemy. Fraught questions begin seething almost immediately in the reader's mind. Who is going to be harmed? Will the harm be emotional, physical, or both? In what richly inventive ways will the setting  Dorset coast, south of France wilderness  facilitate the inevitable crisis? And what kinds of meaning are going to be implicated in it?

The new novel, Sweet Tooth, is no exception. Set mostly in London during the early 70s, it is told (in hindsight from the present day) by Serena Frome, a bishop's daughter brought up in the genteel "walled garden" of a cathedral precinct. We learn in the first paragraph that she was sent on a secret mission 40 years ago, and that it ended badly for her and her lover. Almost a hundred pages pass before we discover the precise nature of this mission; a more leisurely prelude than usual, but just as mesmerising as its predecessors, with every page adding some new hint that deepens or adjusts our sense of what is going to be at stake in Serena's story.

In the post-60s England of strikes, bomb blasts, oil crises, cold war escalation, ideological grandstanding and generally impending anarchy, old-fashioned Serena reads Solzhenitsyn and pledges herself against the evils of communism. A history tutor at Cambridge  an older man named Canning, who has a mysterious scar  recruits her, first as his mistress, then as a spy for MI5. He refines her cold-warrior instincts with heavy doses of Churchill, and disciplines her patriotism with an informed sense of England's glorious past.

We seem to be heading for a story of civilisation versus barbarism; the "seedy, careless insurrection" (as Serena puts it) of the 70s played off against the self-sacrificing heroism of the second world war generation, with Canning's mystery somewhere at the centre. But no: Canning dumps Serena with sudden and (to her) inexplicable cruelty, disappearing out of the story for a long time, and as Serena takes up her career at MI5 other themes emerge. An office intrigue starts up, bringing the subject of sexual politics into play (the pervasive condescension of men towards women in that not-so-long-ago era is reconstructed with painful accuracy). An IRA surveillance operation suggests terrorism may turn out to be the main focus, with perhaps a connection to Middle East tensions and the PLO.

Meanwhile, frequent allusions to the eastern bloc keep the topic of totalitarianism firmly in view, and as Serena begins to demonstrate some totalitarian instincts of her own (she opens a file on a headmaster who attended a meeting of his local Communist party), it looks as if some kind of study in east-west political symmetries might be afoot. Then again, a mysteriously moved bookmark in Serena's room tilts the story towards something more paranoid: is the young spy being spied on?

With all these possibilities in the air, it seems certain that the mission, one way or another, will be intricately bound up with the more significant conflicts of that discordant era. Given McEwan's ability to make riveting fiction out of English politics (not easy), it would be hard to imagine anyone better equipped to write such a story. When Serena is finally summoned to the fifth floor, we accompany her with serious interest and suspense.

It comes as a surprise  amusing but faintly disconcerting  that one of the first things the five men waiting up there ask her to do is to rank the novelists William Golding, Kingsley Amis and David Storey in order of merit. Serena's bookishness, it turns out, is what interests them. Their project is to co-opt some writers of a leftish but non-communist bent, with a view to influencing the British intelligentsia away from its increasingly anti-western bias. They have some journalists and academics already lined up, and now they've decided they need a novelist. The plan is for Serena to pose as the representative of a cultural foundation with money to bestow, and reel in some promising newcomer. The person they have in mind is a PhD student at Sussex who has published some well-received short stories, along with some articles criticising the Soviet bloc.

One resists, slightly, the literary turn. Still, manipulation of the intelligentsia has a deep history on both sides of the iron curtain: the Stasi had a whole department dedicated to infiltrating the peace movement, and  as Serena's handlers point out  the CIA bankrolled Encounter magazine, so perhaps the tale may yet go somewhere deep and dangerous.

But as Serena begins reading the writer's stories, summarising them at length in her own text, it begins to look, unexpectedly, as if the book's real subject is in fact going to be its own navel, or at least its own author. The young writer's name is Tom Haley, but aside (one assumes) from the compromising entanglement with an MI5 operative, it might as well be Ian McEwan.

Most of Haley's stories turn out to be versions of the dazzling pieces that launched McEwan's own career in the 70s. The career itself, from Sussex graduate to prize-winning young Cape novelist, bears a close resemblance to McEwan's own. It's not just a case of thrifty recycling of material, or some jokey glimpse of the director in his own movie: Haley/McEwan's debut as a writer now takes centre-stage in the novel, with Serena (who falls in love with him even as she suborns him with tainted MI5 lucre) chronicling his literary tastes and habits, his reactions to his own growing success, his early encounters with Martin Amis, Ian Hamilton (of the New Review), Cape's Tom Maschler, and so on.

It's unclear to me exactly what McEwan is after with this abrupt swerve into self-reflexiveness. Sometimes he seems to be enjoying the trip down memory lane purely for its own sake, sketching his old pals and their hangouts with nostalgic affection. Sometimes he seems to be wanting to give his younger self a good mugging  for his youthful affectations (Haley starts living on Chablis and oysters, buys an Asprey's silver ice bucket, and announces that "all men should have a 'library' of white shirts"), and perhaps also for some more obscure sense of having let himself become a creature of the "establishment".

Sometimes he seems interested in using the relationship between spy and author as a metaphor for the intricate dance of concealment and trust that goes on between a reader and a writer. Like Henry Perowne in Saturday, Serena strongly dislikes novels that play games with their readers  "no tricksy haggling over the limits of their art", she declares; "no showing disloyalty to the reader by appearing to cross and recross in disguise the borders of the imaginary"  so there's an elaborate joke at her expense (but to what end?) as she finds herself at the heart of just such a novel.

Depending on your tastes, you may find these recursive twists and turns delicious. It's certainly all fairly good fun to read, and the consolidation of the plot around the questions of how Serena is going to square her love with her treachery, and whether Haley's dystopian novel (based on McEwan's story "Two Fragments") is going to win the Austen prize, and if so whether his secret debt to MI5 is going to come out, is gripping in its own way  even if that turns out to be more John Fowles than John le Carré. But those questions don't in any plausible way substitute for the earlier, more momentous political questions.

No doubt it's callow to hold a writer to his word, or his implied word, but after that scene on the fifth floor I couldn't help feeling like Echo in the myth when Narcissus catches sight of himself in the pool. "What about the IRA?" I heard myself bleating inwardly as the book began fixating on its own reflection. What about the PLO? The cold war? Civilisation and barbarity? You promised!

 James Lasdun's It's Beginning to Hurt is published by Vintage.