Judith McPherson is 10. She lives with her father John in a mountain valley, in a town of "broken windows and men with broken teeth". While the town is ruled by the steelworks, the McPhersons are ruled by the Bible. They belong to a sect, the Brothers, who study it daily and carry its warnings of imminent apocalypse from door to unwelcoming door.

In her bedroom, where her father never sets foot, Judith has built a better world, with papier-mâché mountains and clingfilm rivers, fields of brown corduroy and a mirror for the sea. "An acorn cup becomes a bowl, toothpaste caps funnels for ocean liners, twigs knees for an ostrich." A rare visitor exclaims, "What's all this rubbish?" Judith calls it the Land of Decoration, after a phrase in the Book of Ezekiel.

Scorned and bullied at school, Judith has an idea. If she makes it snow in the Land of Decoration, perhaps it will snow in the world outside. Then school will be closed. So she does; and so it comes to pass, though it is only October. And after that, God starts to speak to her. If she can bring the snow, He asks her, what else can she do?

Judith's subsequent miracles are more equivocal than the snow: less definite, less controlled. The conflict that escalates between the McPhersons and the world at large is a result of their original situation rather than anything Judith does, or thinks she's doing. Nor is God any help. Arrogant, aggressive and sulky, He's not much different from the boys at school. Slowly we appreciate what poor Judith has always known: how and why her mother died; the cause and the cost of being Chosen.

Grace McCleen's first novel, though not specifically marketed to younger readers, enjoys a plain, vivid style that might well suit them. Short, thoughtful chapters dramatise tough emotional and philosophical issues through the lonely intelligence of the child who notices everything: the unappealing smells of her fellow-worshippers; the "army of black hairs" in her teacher's nose. She feels her own heart beating, the prickling of her skin. She steals downstairs to peek in at her father, who never notices anything. He is sitting in his chair, doing nothing. Sometimes he isn't even crying.

The suspense, which is terrific, all comes from repression of energy, both emotional and narrative. One Sunday, after much tribulation, John buys his daughter some fish and chips. They're not expressly forbidden, yet the sense of transgression is unmistakable, even shocking, to Judith and so to us. The pathos of her responses  delight, fear, sadness, hope, speculation  is sharpened by the restrictions on her ability and liberty to articulate them.

At her own level, of course, Judith is extraordinarily articulate, as her teacher confirms. This is a 10-year-old who imagines prayer as "a long-distance telephone call". If that's a problem for us as readers, the problem is not that a 10-year-old should make such a comparison, but that she should have that phrase in her head at all. When is this story taking place, exactly?

John McPherson wears a moustache and overalls. He has a desk in which he keeps writing-paper, a stove for which he chops his own wood, and a radio on which he listens to Nigel Ogden, The Organist Entertains. So far, perhaps, so wilfully old-fashioned; but the world outside is quite as contrived and confused as the interior of Judith's bedroom. In the unnamed town, Woolworth's and Kwik Save are still in business, and Lucozade bottles still wrapped in yellow cellophane. In the Brothers' leaflets, the threat of materialist novelty is illustrated by drawings of youngsters in headbands and miniskirts brandishing transistor radios. Judith's classmates wear trainers and want rollerblades, but none of them has a mobile phone. There's not a single computer anywhere, let alone any internet; yet Judith knows there is a scientist the Brothers "like to argue with", and his name is Richard Dawkins.

Any author, of course, is free to scramble history into any shape they fancy. By doing it in this book, though, McCleen perilously weakens her argument. Absolute faith, she suggests, can be a kind of escapism, a compensatory strategy that easily turns pathological. But if what you're escaping isn't real in the first place, where's the harm?

The Bible is full of tales of the underdog defeating oppression through faith and wisdom, and nowhere more so than in the Book of Judith, where the heroine uses wily deceit to convince her countrymen that God would keep them safe. How Judith, the 10-year-old heroine of Grace McCleen's fascinating debut novel, must have loved that story. Growing up with her father as part of a fundamentalist sect, Judith is the fervent one of the family, a girl for whom loss of faith is the worst thing of all, who loves to read the Bible aloud, go doorstepping to preach with her father, and sit at home to  solemnly and calmly  await the approaching Armageddon, when all non-believers will meet their end. It's the aftermath of this that fascinates Judith most, and in her bedroom she has created a miniature Land of Decoration, in homage to the land promised to the Israelites in her adored Word of God.

Yes, she's fervent.

But Judith's world is under threat. There's the school bully, Neil Lewis, whose attacks drive her to wish she could intervene in the divine order by changing things in her own miniature world, and about whom she has long talks with a particularly vengeful and far from benevolent God. Then her father makes the decision to continue working when the union at his factory goes on strike, and all manner of pestilence is unleashed upon them, and their life really does become one of hellish persecution.

McCleen's debut has rightly been much anticipated, not least because the author grew up in a similarly fundamentalist environment and the authenticity of the experience is part of what makes the book  and its astonishing young heroine  so memorable. The conceit, too, of a little girl believing that the miniature world she has created has the power to change the world around her is a cute, clever one. And the scripture-inspired writing on imagination is beautiful: "There are palaces in clouds, mountains in rock pools, highways in the dust at my feet and cities on the underside of leaves". But more than that, this young writer has done a brave, bold thing, writing what is effectively a religious allegory set in the mid-80s Welsh valleys. The community she depicts truly has an end-of-the-world feel  it is aggressive and hostile, full of chaotic, deprived households, a nightmarish vision of strikes and riots and bullying.

Like her biblical namesake, Judith does conquer her oppressors, but there is no sense of triumph the novel's final message is of religion's failure to offer real solace. Happily, one senses that Judith has the steeliness, the intelligence and the imagination to survive and thrive. Surprising, affecting, thoughtful and complex, McCleen's novel grows in power the more time you spend with it, and marks her out as a writer to watch.