"Words are the only things that last forever," Winston Churchill declared in 1938. For a man who lacked any Christian sense of eternal life, they were his guarantee of immortality.

Churchill the wordsmith has been remembered mostly for his wartime speeches  "finest hour", "end of the beginning" and so on. But in the last decade, as Peter Clarke notes, more attention has been paid to Churchill the author  for instance in Roy Jenkins's masterly biography, in John Ramsden's meticulous exploration of the Churchill legend and in my own study of Churchill's war memoirs.

In this fascinating, erudite and witty book, Clarke takes a broader look at Churchill's literary career, focusing on a project that took him a quarter of a century to complete  A History of the English-Speaking Peoples, which he contracted in 1932, was supposed to deliver in 1939 and eventually published in 1956-8. This was no mere antiquarian diversion. As Clarke says, Churchill's profession was writing but his vocation was politics. The concept of the English-speaking peoples would shape his thinking and speaking about foreign affairs through the second world war and the cold war.

Writing may have been Churchill's ticket to immortality but, more urgently, it was essential to pay the bills. "My tastes are simple," he would say: "I like only the best." And the best cost lots, as Clarke's historical accountancy graphically shows. In the 1930s Churchill's basic salary as an MP was £360 a year, considerably less than his wine bill. His most expensive indulgence was Chartwell, the country house with a spectacular view over the Kentish Weald that bewitched him on sight in 1922.

He had just come into a nice Irish inheritance, which could have provided him, Clementine and their four children with a secure financial base. Instead, to Clemmie's dismay and even anger, he took out large mortgages at high interest rates to buy Chartwell and then poured thousands of pounds into renovating and landscaping the ugly Victorian manor house. Not until Lord Camrose and other benefactors clubbed together in 1946 to buy Chartwell for the nation on condition that the Churchills could live there for the rest of their days did the house become an unalloyed pleasure.

In the 1930s, however, Winston was writing around the clock to fund his folly, after losing his ministerial salary and watching his American investments collapse in the Wall Street crash. In 1932, despite having two books outstanding (including a biography of his martial ancestor the first duke of Marlborough), he signed up for A History of the English-Speaking Peoples: the deal was £20,000 in return for waiving all future royalties.

The next few years saw what Clarke calls "a struggle on two fronts" as Churchill the author tried to complete both projects, while becoming obsessed as a politician by the menace of Nazi Germany. Marlborough was eventually buried in four volumes at the end of 1938; then Winston raced against time to complete A History before history caught up with him. When Hitler became Churchill's full-time profession in May 1940, he had reached only the end of the American civil war.

In retrospect, it seems entirely natural that Churchill should write about the English-speaking peoples. He was, after all, the product of a genetic English-speaking union between a British aristocrat and an American heiress. But Churchill was a man of different parts. In domestic politics, notoriously, he switched from Tory to Liberal and back to Tory again. Less familiar are his shifts in foreign policy. The leader now renowned as an unyielding critic of the "iron curtain" spent much of the second world war convinced of the essential good faith of Joseph Stalin. Similarly the famed apostle of the "special relationship" evinced little interest in his mother's homeland for much of his early career  never even setting foot in the United States between 1901 and 1929. In the 1920s he was notorious in the cabinet for his outspoken criticism of the "arrogant" and domineering Americans over war debts and naval building: even Clemmie commented on his "known hostility to America".

In an intriguing chapter, Clarke shows how the concept of the English-speaking peoples developed in the 1890s and peaked in the 1920s, after the wartime alliance of 1917-18. It was originally a radical idea, used by politicians such as Lloyd George to argue that the British should learn from their young transatlantic cousins and adopt full democracy. Churchill picked up the catchphrase late, in the early 1930s, and used it opportunistically, to make money. But, in time, it would shape his outlook on war and peace.

Just as in the 1930s he saw the looming struggle with Hitler as successor to Marlborough's battles against an earlier dictator, Louis XIV, so in wartime he conceived of the alliance with the United States as the latest and greatest expression of a deeper cultural unity, rooted in common language and values. Clarke shows that the draft of A History that was put on one side in 1940, though assembled by assistants, was essentially Churchill's work, which expressed his Whiggish conception of English history as an unfolding story of liberty and representative government, now spread across the seas to North America and the Antipodes.

That was his credo during Britain's "finest hour"; that was how he sold the wartime alliance to his newfound friends across the Atlantic, coining the term "special relationship". When Churchill finally returned to the project in the mid-1950s, he was a shadow of his former self  exhausted by six volumes of war memoirs and a second term in Downing Street. The task was completed by a syndicate of academic ghostwriters, among them AL Rowse, JH Plumb and Asa Briggs. They tried to introduce scholarly rigour into Winston's Whiggish saga and the work ended up betwixt and between. But no one cared: Churchill made money, so did his publishers, and he had long since written himself into immortality.

 David Reynolds's In Command of History: Churchill Fighting and Writing the Second World War is published by Penguin.