JOHN LE CARRE's latest novel, The Honourable Schoolboy, is reviewed opposite. Its theme is the one Le Carre has made his own: The intellectual complexities and moral ambiguities of the secret world of intelligence services. Its two principal characters, George Smiley, who has been promoted to put the British intelligence service back together after a disastrous Soviet penetration, and Jerry Westerby, the agent whose cover is that of a hardbitten war correspondent, are enriched and developed. The location is new and brilliantly described: Hong Kong and Southeast Asia in the twilight of the Vietnam war, Godfrey Hodgson, who has known Le Carre since they were students together at Oxford, talked to the writer in his London home last week about craftsmanship, morality, and the secret world:

Q. When I called up I was told you were supposed to have started your new book yesterday. That suggests you're someone who can work to a timetable. How do you set about starting a new book? What comes first: theme, characters, location?

A: What comes first is the industrial waste from the previous book, always. What I will do to start with is put together the notes, the backs of envelopes, and all the stuff, and close my mind to everything else.

It begins always with a couple of characters, I find. And one of the characters in this case was a fellow I wanted to fit into The Honourable Schoolboy and couldn't. So he was really industrial waste from Tinker, Tailor, Soldier, Spy. And I'm very lucky at the moment, because each book as it closes provides me with a springboard in structural terms. I mean we know Smiley is out in the cold again; that the s-ts have taken over in the Circus; the Anglo-American link has been reforged; and that the Smiley-Karla confrontation can be extended.

I have come to think of Tinker, Tailor and this book and the next two - as I think it will be - as a single continuing novel, so I really am as excited as I hope my readers are to know exactly what will become of the Smiley-Karla relationship.

Q: Do you begin to perceive the resolution of that?

A: I do in geographical terms, yes. I think I know where their last encounter will be.

Q: Let me guess: Is it Washington?

A: (Laughs) No. Nein.

Q: Critics keep writing that you must inevitably someday leave the secret world. You did actually one do that . . .

A: I did once do that, and it was, as far as the trade is concerned, a disaster. I honestly believe that critics will gradually come round to what the public has long recognized, that the spy novel is as flexible, as valid a theme in our time as any other major theme, as valid as the love story. I think it's the critics' problem, not mine.

Q: Is the secret world for you a model of all human systems and relationships?

A: Yes. For me, it's a microcosm of all institutional behavior, and of the ever-repeated dilemma which overcomes individuals when they submit their talent for institutional exploitation.

Q: So it's no different from what happens to a man when he works . . .

A: (Interrupting) . . . for a newspaper. Or a big corporation. I know from readers' letters that much of what the man in the street gets out of my books has nothing to do with secret services, it has to do with the way he sees life in his own office. He says, "yeah, it really is like that, it's a question of kissing ass, making secret compacts, looking over one's shoulder all the time."

Q: And yet you've spent less time in offices than almost anyone I know?

A: That's right. I was free from that at the age of 31. I think I was so much of a striver myself that the short time I spent trying to advance through an institution left an indelible impression on me.

Q: There are two pairs of themes which seem to be almost obsessive in your books. One is truth and deceit, the other is loyalty and betrayal. Why? Is this buried in your personal experience?

A: Well, the preoccupation with deceit does, I think, very much relate to the way my late papa lived. We all knew that for, I think, the last 30 years he was an undischarged bankrupt.But he managed to keep an office in Jermyn Street going, and a house in the country, and ran a couple of cars, and raised credit. He lived dangerously, and he lived a very dangerous love life. As kids we were very aware of that, and we knew that we couldn't tell this to that person or that to this person, whether it was money or love. But he had such wonderful plausibility, and always such a wonderful potential, that he drew on his credit and his charm indefinitely. So my brother and I, we followed. We used to sing together, "my old man says, follow the band . . ."

I think there is a theme in my work, to do with deceit, which says almost as one critic put it recently, to act is to betray. That the individual identity is really irreconcilable with any collective behavior. And that's probably just the posture of the outsider.

Q: But you seem to be saying with Westerby in The Honourable Schoolboy, that a man can arrive at some kind of truthfulness through action, even though in so doing he betrays, perhaps, his mother, his girlfriend, his wife, his superiors and even the organization he's acting for?

A: You see, all of these people, Smiley, Jerry, or the girl, Lizzie, they're all looking for their own moral center in some way. They all believe that in some way they're doing good. Smiley believes that he is sublimating his own personal feelings for the general good. Jerry believes that in sublimating his feelings to Smiley he too is acting for the general good.The girl believes in true feeling.

Q: While at the same time, she's a tart.

A: That's right. The moral centers shift, so that by the end of the story Smiley is appallingly tortured by the fact that he has deployed friendship so as to bring about someone's destruction.

Q: There's a conflict in your work which I find interesting. You are offering as a moral justification the work itself. Smiley, or Westerby, or other characters, achieve justification because of their faithfulness not to wives, girlfriends, or anything else, but to the task itself. At the same time you're saying, in the most biting and penetrating way, that this particular kind of work is almost useless, and largely pernicious.

A: You are absolutely right. You've nailed the paradox. But I function at one level when I write, and that's the level at which I convert observation into fable and narrative, and try to draw stories out of a morass of what we all know to be paradoxical information. We are divided. Those of us who've been on nodding terms with these outfits have learned, very seriously, to wonder whether they're any bloody good at all. But if they are good, if they're going to stand up and be counted against the KGB, which without doubt is a ruthless, messy, vile, and very effective organization, are we going to feel safe with them? So that I don't think I'm being slippery when I say that the paradox is one we all share.

Q: It's the moral problem of the man who has to be a martyr for a religion he doesn't believe in?

A: But when we look at the heathen, we run back and take new faith. However liberal and doubtful we may be, there is absolutely no doubt that world communism is not something I wish my children to be subjected to.

The novelist in me is always wrestling with this problem at an artistic level. You see, I have to invent a kernel of great professional competence, which is Smiley. There has to be, at the romantic level, a degree of excellence. It's something we all want, as readers, and without it you get perilously close to farce and chaos. Which perhaps may be the true version of secret service work. We've certainly seen that in the Watergate hearings. Farce, chaos, the goldmakers, the charlatans, the fantasists. We had a whole parade of them at Watergate.

Q: You seem to have an attitude to the United States that is perhaps a classically European one: You seem to suspect the U.S. of representing, with immense power, dangerous value systems. Your Americans seem almost to be zombies, without apparently any personal moral or intellectual dilemmas of their own.

A: Well, the American intelligence outfit as I see it in the book actually represents two kinds of Americans. There's the tweedy. Yaley sort, who's Martello, the Allen Dulles ecole, you know: "We're elitist chaps, used to privilege, so it's no problem for us to exercise these rather extraordinary powers." And then there are the gray men, who should be feeding computers with information from the satellites. These are the figures one saw around the edges of the Vietnam War, who had all sorts of pretty words for "kill." They're scary.

Both Jerry and Smiley, I think, have the same feeling about Americans. It's not just a condescending European view. Both of them have a rather shameful respect for the fact that the mantle of power has moved west. As Macmillan said, that we may have the knowledge, but no longer the power. That we're the last of the Greeks. It's a Gaullist view too.

Gerry doesn't care for large-scale theories, but he did dimly recognize that he belonged to the class that had thrown away the game. And that he in some indirect way was responsible. It's not just a question of feeling that the power has gone to the wrong chaps, but also a question of feeling that one had f - ed it up.

And Smiley also is very much concerned with raison d'etat. He knows that one must go to where the power is. He says to Jerry very firmly, either you're in or you're out. He says in effect: "I belong to the generation that was born into a debtors' prison, and it's our luck that we've got to spend our lives buying our way out." This sense of generation guilt is very strong in the book.

Q: You seem to portray the Americans as agents, and not also as patients; to miss the tormenting sense of impotence and limitations which have been part of the life of this kind of American in this generation.

A: It's probably true that at the technical level I've failed to bring that kind of sympathy to the American, but there is a moment when Jerry meets a CIA man in the field who holds out his hands, and says something like: "I'd like you to shake me by the hand, we've just become a second-class power."

Q: You very accurately make that kind of American contemptuous and almost racist about "the Brits" . . .

A: That's right, that's something we've all met. And I think maybe I failed to dramatize something that came over to me very strongly during my tours of Southeast Asia, and that was that the Americans and the Brits have been drawn far closer together by the collapse of the Southeast Asian adventure. Because the Americans learned then a lesson about the limitations of power.

Q: You're also saying something, it seems to me, that is expressed in Ecclesiastes, where it says, "the race is not to the swift, nor the battle to the strong." That personal excellence is unrelated to success.

A: I believe that is so, yes.

Q: And I believe that, in general, Americans tend not to believe this, but to believe that one does well by doing good.

A: Yes. Perhaps Americans also believe that the man who has succeeded, almost by definition, will become a good man. It's part of the presidential image.

Q: And you don't believe that?

A: I think it has yet to be demonstrated.

Q: Let me ask you something which is very topical in the United States at the moment: you present a lot of the journalists in your book as having worked for intelligence services. What is it that you're saying? . .

A: Well, as a practical matter, it's surely an open secret that any journalist worth his salt knows the identity of the heads of the secret services in the areas where he functions. It's also an open secret that there's a sort of mutual dependence. A journalist is frequently able to tough his way into an interview which would be denied to anyone with any other sort of ascription. So it seems to me to be idiotic to imagine that these things didn't go on. What's happening is that the public is catching up consciously with what, subconsciously, it knew all along.

Q: Yes, but there are two different things, aren't there? One is that journalists have relationships with intelligence agencies, and the other is that you suggest that some journalists are actually full-time agents?

A: Well, so it now seems, according to Carl Bernstein and others. It seems to me again to be a matter of common sense. If I were an intelligence officer looking around for cover, I would look for the overseas business community, the diplomatic community, the international organizations, and finally, most obviously - who provide the most mobility? The press. It really is extraordinary to me how jumpy people are on this whole spy subject.