Magnus Mills's gift has always been his ability to create the weird from the workaday. Ever since his Booker prize-nominated debut novel, The Restraint of Beasts, was published in 1998 to rave reviews, he's taken situations his reader can imagine  building a fence or an expedition to polar regions  flipped them on their heads and shaken them around. Mills's stories are always solid, crafted from deceptively simple sentences and concerning simple characters trying to achieve simple goals, which makes their sudden flights of fancy all the more unexpected.

That ability is undiminished in this collection of short stories. In "They Drive By Night", a lorry driver and his mate pick up a hitchhiker and spend the journey screaming over the noise of their engine at each other, only to lapse into silence once they reach a quiet cafe. In "Hark the Herald", a lonely Christmas-time visitor to a guesthouse manages constantly to miss the festive parties and meals, never seeing another guest during his stay. These are just some of the stories that fit snugly into familiar Mills territory: pleasingly unsettling. There are also more straightforward tales that give you a sense of nostalgia rather than unease. The titular "Screwtop Thompson" is another Christmas story (there are three in total  a very vague theme to the collection), but it's a more typical account of family bad feeling during the season of goodwill. Similarly, "A Public Performance", about a boy at a 1970s Led Zeppelin gig, skewers teenage pomposity with a kind poke.

Mills typically writes very short short stories; here, the average length is 10 pages, printed in quite large type. This collection is actually a reprint of an anthology first published for Acorn Books, an independent publisher that specialises in haiku and minimalist poetry: an appropriate home for Mills's brevity. It's technically impressive that he can create a believable world and cram so much into those brief sides of paper  it makes me think of those multivitamin tablets that provide you with all your nutritional needs in one swallow. But sometimes you do want more to chew. Mills's novels work so brilliantly because they give you time to sink into the apparent normality of his story before he pulls the floor away and lets the surreality creep in. With 10 pages there just isn't the time. These are stories you marvel at for their precision rather than narratives to lose yourself in. You certainly wouldn't take this book on a long train journey.

That said, no one should pass up the chance to read these fascinating tales. If yuletide stirs up all sorts of buried family guilt for you, make sure you read "Once in a Blue Moon" before going home for Christmas. In it, the narrator goes on a rare visit to his mother only to discover she's followed his platitudes and ill-thought-out advice for her life all too carefully and is currently holding police snipers at bay with a large gun. It's Mills at his best: sharp, precise and very dangerous.

Magnus Mills writes with a childlike clarity about very grown up worlds. His typical characters are labourers, working men and artisans who shuffle around on the margins of society. The power of his fiction is often generated by the tension between the disarming transparency of his prose style, and the dark complexity of the worlds it describes.

In the 11 stories collected together here for the first time, the language is plainer and simpler than ever, and as a result the stories acquire a stark vulnerability. It is in the short story form that a prose writer's skills are most exposed. There is no sprawling narrative or complex array of characters to hide behind. In the short story we are most likely to see the creaking machinery of fiction at work. Mills's stories, with their one or two characters and their hardly-there-at-all storylines, can seem so naked you almost want to pick them up and take care of them, like chicks that have fallen from a nest. And then, to your surprise, you find they are very robust things indeed.

The pieces in Screwtop Thompson are clustered around a title story that features the eponymous toy, a cheap plastic figure from the 1970s, trashy yet coveted by the young narrator. He is a sort of civilian action man, coming in a variety of guises  policeman, fireman, sailor and so on. In some ways he stands for the spirit of this collection as a whole, where it can sometimes seem that the only defining quality of a character is their costume  builder, hotelier, priest, Chinese chef (rather like that other icon of 70s childhood and fancy-dress shop denizen, Mr Benn).

It is the main weakness of this collection that character is not taken very seriously, which means that the stories struggle to achieve an emotional resonance. Quite often this is clearly not the aim. Instead the desired effect is a sense of puzzlement, bemusement, a faint chill, a quiet chuckle. Like the child narrator of "Screwtop Thompson", Mills is trying on different heads and costumes, parrying different characters against each other, often with no discernible purpose other than the pleasure of playing.

The first story in the collection is in some ways the least characteristic (and perhaps the most enchanting), because it is more deeply rooted in the world we know. It is about an enormous sheet of plastic that becomes snagged on the parapet of a railway viaduct. The people working in the arches beneath the viaduct, and the narrator who lives over the road, both wonder what to do about it. Nesbitt the joiner is convinced he can put the sheet to good use, if only he can get it down, but the sheet refuses to budge. The narrator, like many characters in these stories, drinks tea while he contemplates the problem, and adjusts to a life lived in the sheet's unsettling presence. This piece of industrial detritus is full of symbolic potential. There is a story by Elizabeth Taylor in which a swan lands in a run-down pit village, its unbidden beauty throwing the villagers into confusion. The sheet of plastic is doing something similar here, though Mills is careful to avoid any mawkish symbolism. There is no crisis in this story, just a gentle bemusement and the faintest sense of unease. The sheet is just a sheet. When it is finally removed, the narrator has trouble sleeping, and that is all.

Some stories move towards a deeper, more troubling crisis. The children who play with the versatile Screwtop Thompson are quarrelsome and mean. This is one of the few stories in which the characters are stirred to a more demonstrative form of action, compressed brilliantly into the final sentence. In "Once in a Blue Moon", the normal strains and tensions of visiting an elderly parent are thrown into sharp relief by having the mother as the shotgun-wielding focus of a police siege. The son addresses her through a loud hailer, making commonplace chat in an amplified voice.

The comic hyperbole of this story takes it close to the realm of fable (Aesop is referenced early on in this collection), and many of the stories offer tantalising possibilities in this direction. If they can be frustrating, it is often to do with one's resistance to their author's eccentric worldview and his reticent style. Once you allow them to take hold, a peculiar magic happens. Between their delightful opening lines and their eerily suggestive endings, these pieces can be as surprising and as unpredictable as those half-forgotten stories we read as children.

Gerard Woodward's Nourishment is published by Picador.