'Iswim in the sea most days," says Neil Jordan. Usually, he gets in at White Rock, down a cliff path from where he lives with his second wife Brenda on Sorrento Terrace, overlooking Killiney Bay in south Dublin. "I used swim all through the winter, but not this winter. It was too cold."

Apart from a few years spent packing champagne bottles in the cellars of Fortnum & Mason, London, after he left UCD in 1971, Jordan has never been far from the sea. He was born in the seaside resort of Rosses Point, Sligo, where his father was a teacher, and grew in Clontarf after his family moved to Dublin when he was two. As soon as his films began making money, he bought a house at the end of the esplanade in Bray, next door to where James Joyce lived for a while as a boy. Now just turned 60, he does much of his writing at his other home overlooking the Atlantic near Castletownbere in west Cork.

A sense of the sea runs through all his fiction and his films: uncharted watery depths become a metaphor for disturbed minds. "I was always only able to finish a piece of fiction if it was in water at some stage," he says. "The sea is a great way of beginning and ending things."

Much of In Dreams, his psycho thriller about a woman who discovers her nightmares anticipate dreadful things about to happen, was filmed underwater: he directed wearing a wet-suit. His 2004 novel Shade, set around the estuary of the Boyne where his mother was born, is about a woman who as a child senses a presence in her life: it's only after she's murdered and dumped in a septic tank that she realises the presence was her own ghost.

Jordan wrote Ondine, a film about a fisherman who finds a beautiful girl in his nets and suspects she may be a water spirit, while he was in Castletownbere and filmed it there too, putting the camera on the fishing boat close-up to the characters to capture a sense of the elemental.

The fisherman, played by Colin Farrell, tells his sick daughter about the girl which she imagines into something more, a fairy tale that wants to be told. Paradoxically, when reality violently intrudes, the story ends like a real-life fairy tale.

"It was like the place suggested it. I didn't know what kind of story it wanted to be. The daughter was a bit like me, kind of the voice of the author saying where is this story going, what's this about, is she real or is she not?

"I suppose in the end the film is about imagination in ordinary life. Are we the sum of our experiences? Am I the person who sits in here talking to a tape recorder with somebody I've met many, many times? Or am I all weird little bits of imagination that are floating through my brain. I don't know what I am. I'm sure I'm both, in a way."

People tend to imagine themselves in ways that may not have much to do with how they actually are, an emotional duality explored in one of Jordan's first stories, 'Skin', published by David Marcus in New Irish Writing when Jordan was 24 and already married: thoughts flashing through a wife's mind as she peels the layers off an onion at the kitchen sink prompt her to drive to the sea in a vain attempt to escape her dull marriage.

'Skin' was in his first collection, Night in Tunisia, published two years later by the Irish Writers' Co-Operative, a collective of writers set up with Des Hogan and Ronan Sheehan because there were no outlets in Ireland for Irish fiction. It won the Guardian Fiction Prize and encouraged Poolbeg Press and Blackstaff in Belfast to specialise in new Irish writers. Sean O'Faolain acclaimed the title story 'Night in Tunisia' as "one of the most remarkable I have read in Irish story-telling since, or indeed before, Joyce".

Much that Jordan has written since has been a riff on themes and motifs flowing through this extraordinary first collection. Several of the stories are about growing up, nearly all were filled with a pervasive sense of the sea. The idea in the title story of jazz as a release, for instance, recurs in his first film Angel, and The Crying Game gets its title from a Charlie Parker saxophone piece featured in Night in Tunisia.

His stories read like films not yet filmed. "There always has been an image at the centre of my approach to writing," he told me while writing his first novel The Past: his idea was to use old photographs as triggers in a narrator's search for the truth about his parents and his own origins. By then he'd started working with John Boorman on a screenplay, Broken Dream. It never reached the screen but earned him the chance to direct Angel.

While writing his second novel, Dream of a Beast, in which a suburban man dreams that he has become an animal, the name of which he doesn't know, he also worked on a second film, The Company of Wolves, an adaptation of Angela Carter's re-telling of 'Little Red Riding Hood' through a little girl's eyes as Freudian seduction.

The cinematic tools of flashbacks and flash-forwards structure his ­fiction.

Memories of a past that is still present shape his 1995 novel Sunrise with Sea Monsters, in which a son returns from prison in Spain to rain-swept Bray to find his once-dominating father dramatically changed. It was published soon after the box-office success of Interview with the Vampire, a film seen entirely from the viewpoint of a vampire played by Tom Cruise, just as The Butcher Boy is told through the eyes of a psychotic boy.

Soon after his low-budget The Crying Game grossed $60m in the US, becoming one of the year's most profitable films, literary critic Eileen Battersby suggested that "fiction's loss was film-making's gain".

There seems to be a mistaken assumption that being a film-maker is somehow incompatible with writing literature, which would rule out Graham Greene, Harold Pinter, David Mamet and other writers who also worked in cinema. Jordan hasn't been lost to cinema. He keeps challenging readers with fiction while also pushing the boundaries of cinema as a story-telling medium. He leads a double life as a writer who makes films and a film-maker who writes fiction.

"A film is a bit like writing a short story because you see it in one sitting, don't you? You can think it all through in your mind from start to finish, whereas a novel is something entirely ­different."

Hollywood, of course, has its pitfalls. When The Heart-Shaped Box, a story by Stephen King's son Joe Hill about a man who buys a haunted suit at an auction, was put on hold, Jordan returned to Castletownbere. "I could see myself sitting in Hollywood waiting for months. I didn't want to do that."

Earlier, when money for The Borgias fell through, he wrote Shade. While waiting for Ondine to be released he completed a fifth novel, Mistaken, a doppelganger story about a man from the northside who is always mistaken for a man from the southside who turns out to be a writer: it's to be published in January. "Oh, is that how it is," he laughs. "There's a big disaster, so I write a novel."

If a Jordan project stalls, he puts it to one side and gets on with something else. The success of Interview with the Vampire enabled Michael Collins to finally be financed. Now The Borgias has been rescued from limbo.

"DreamWorks owns the rights, so I asked Steven Spielberg to have a look at it again. 'Why don't we think of this as a cable drama series?' he suggested. He's a bright guy. It's perfect for that. You can do things with it that you can't do in a feature film, where you're trying to squeeze history into an hour-and-a-half. They've ordered 10 one-hour episodes and if it works they'll order more."

Jordan will direct the first two episodes with Jeremy Irons as Rodrigo Borgia, the manipulative patriarch of the notorious medieval family. Shooting begins in Hungary and Italy later this year.

You could argue that Jordan's career is a marvellous double act in which the film director Jordan is a doppelganger of the novelist Jordan, or vice versa.

"I keep busy," he shrugs. "There's lots of stuff to do. I read in the New York Times that auteur is another word for unemployed. So many fine film-makers haven't made anything for years. That's not a creative life. To me a creative life is getting up every day and doing something."