Natacha Atlas's music treads a blurred and fuzzy line that connects Spinal Tap, Sly & Robbie, the Egyptian crooner Abdel-Halim Hafez and Stuart Hall (the academic, not the quiz show host). As one of the main collaborators with Transglobal Underground and the Nation label, she works to reinvent the notion of Englishness as the sum total of its post-colonial detritus. On songs such as "Leysh Nat'Arak" ("Why Must We Argue?" from her forthcoming solo album, Diaspora, she blasphemously marries her Sephardic Jewish ancestry to an intimate knowledge of Arab music to create, as she puts it, "a flavour which is Middle Eastern more than it is one type of Arab."

Inhabiting parameters far outside the realm of the established World Music orthodoxy, Atlas and her partners in crime thumb their noses at both the purist commentators whose dodgy notions of racial identity freeze cultural mobility in a mire of essentialism, and the fusionists whose stupefyingly earnest crossover projects imprison non-Western music within the confines of coffee-table exotica. What comes across most in her music is the paradoxical combination of euphoria and dread that emerges from the unfettered state of rootlessness. As Transglobal Underground's Count Dubulah, who worked closely with Atlas on the tracks for Diaspora and sits in on today's interview, says: "Nobody seems to be able to cope with the idea that you don't have to be just one thing." At the same time, however, without an artist assuming a certain amount of distance, the creative process can suffocate under the safety blanket of a tradition-fixated culture. Of the layered, ironic pastiche of contemporary British culture that characterises both her own music and that of Transglobal, Atlas says, "No one really knows what's going on, everything's up in the air. It's a bit of an undefinable mess." Dubulah adds, "One of the big problems with World Music is there's this perception that people are incredibly, overly serious. There are some really serious artists. There are people who do work very hard to get good at their craft and to touch the infinite and transcend themselves. But actually, they also have a laugh, go to the lavatory, and there's a human side to them which doesn't come across in the overly stylised presentations." As an antidote, Atlas and Transglobal add a palpable sense of barbed fun to their particular brand of World Music. Transglobal's music can be read as a merciless piss-take of the very idea of 'Englishness'. The carnival atmosphere of their live shows and that what's-gonna-come-next sensation fostered by their records stands in direct opposition to this island's world-renowned stodginess of character. Talking about the struggle over what is 'authentically British', Dubulah says, "The most English things I do are drinking tea and drinking beer - and they're not even originally English. The fact that the Royal Family has over the centuries included Dutch, Germans, Austrians, Russians, has been carefully hidden. . . So what's called the Queen's English may actually be some form of Dutch."

For Britain's post-colonial, expatriate community this sense of mischief is a radical and powerful political statement. A playful refusal to conform to received identities jostles the rigidity of a class structure that refuses to accept anything that can't be pinned down and classified. Its sense of humour riffs off the fact that immigrants were originally lured here solely for - and defined by - their labour. Of course, the notion that there is one singular and unique English character is simply another version of the fundamentalist impulse that the music of TGU and Atlas refuses to acknowledge. When I ask about the potential contradictions involved in using music that evokes, and possibly re-inscribes, the troubling roles that women play in many Islamic societies, Dubulah responds: "no matter what you do, you will offend someone. That group will change depending on where you are, who's feeling that they've been put upon, and who needs to have their religion treated more respectfully. And if that happens to be a particular section of Muslims at the time, it will be. But, by the same token, fundamentalist Christians find everything offensive. If they had their way, everything would be banned. There are the extremes of religion on one end of the spectrum, left-wing political correctness on the other, and in the middle, you're a human being."

The best music has always resulted from it being pushed and pulled along this spectrum: for instance, the holy roller zeal knocking against the urges of the flesh in the songs of Jerry Lee Lewis, Elvis, Al Green, Khaled. The fall-out from post-colonialism has put a new twist on this previously internal dialogue. For Malaysian Speed Metal kids of the Black Rock Coalition or Bally Sagoo and Apache Indian (with whom Atlas worked on "Arranged Marriage"), the inner conflict between tradition and mobility has been projected outward as a challenge. Whether it's by wearing her belly-dancing costume into a five-star hotel in Israel or by singing the praises of Allah in a very secular context, Atlas positions herself firmly in the latter camp. This willingness to play with images takes on an added significance for someone treading on the scabrous territory of a culture that, in the West, is permanently linked with terrorist nightmares and ear of Islam's whirling dervishes. Dressed for the interview in pastel pinks and blues from Debenhams and matching retro trainers decorated with sari patterns, Atlas is constantly tinkering with her image, using her scarf at various times as a veil or as a headwrap, relishing her freedom to play different roles. Without denying their plight, she suggests that it's a freedom more Middle Eastern women have than many Westerners are willing to accept. "You see a lot of Middle Eastern women here and they might have to go out with this veil on, but they've got three tons of make-up on nevertheless. They've got their veil on, a long coat on and underneath, they've got on the sexiest underwear. . . Usually, they'll find a way of liberating themselves somehow."

For Natacha Atlas, the heresies of cultural and musical miscegenation are a lifeblood. "A dub bassline makes me want to sing. I usually get inspired by groovy bass. A darabouka [a drum from the Maghreb similar to the tabla] rhythm and a groovy, dubby bass - the fusion of these two." These two rhythms work perfectly together to form a foundation for Diaspora's exploration of the Middle Eastern music that is Atlas's first love. Rather than featuring the densely interwoven textures of Transglobal's last album, International Times, Atlas's solo project is marked by the predominance of her gorgeous, yearning Arabic vocals and the subdued elegance of Egyptian oud virtuoso Essam Rachad, with whom she co-wrote the sublime "Feres". This track features a delicate interplay between the oud, Egyptian string arrangements and piano (at one point, it is reminiscent of the high drama of the tango) to give full breath to the lyrics' poetic sweep across the grandeur of romantic love. Travelling from the ache of pining to devotional fervour to the weightless grace of ecstatic surrender, "Feres" encapsulates the breadth of the emotional range of Arabic music and culture. With its emphasis on creating music with a 'Middle Eastern flavour', Diaspora is a more cohesive album than either of the two Transglobal albums. "The main difference is that there's less samples and more live playing," explains Natacha. "The way we work together is different. With Transglobal, Attia [Ahlan] will do a bit, then Dubulah will do a bassline, then maybe three weeks later I'll come along. With my stuff, we've all been in the studio together. It's a different attitude." Although it's not as rabidly heterogeneous as most of Nation's output, Diaspora (which has actually been licensed to the label's Mantra subsidiary) does not shy away from experimentation. As Count Dubulah says, "It's very much a contemporary Arabic crossover record. It sounds normal to us, but compared to what else is around, it's still odd." The possibilities suggested by dub's re-colonisation of musical space and time are a touchstone: Atlas's first single, "Dub Yalil", used its ominous basslines and slo-burn drum rolls to achieve an effect similar to Massive Attack's "Safe From Harm", while the remixes that close Diaspora use dub's spatial logic to rework the songs' emotional direction. The "Dolmus Mix" of "Fun Does Not Exist" darkens the original until the didgeridoo drone and percussion work together to recreate the momentum of the drum solo from Iron Butterfly's "Inna Gadda Da Vida". The "Balloon Mix" of "Diaspora" takes the title seriously and scatters fragments of the melody every which way. According to Natacha, the use of techniques like dub basslines and sampling Grandmaster Flash is "definitely a way of keeping [traditional Middle Eastern music] alive. It's also a way of bringing it alive over here. . . A lot of people, even in the Middle East, are afraid of the old music dying out, but it's patronising to think that that only happens in the West. Everyone is affected by technology."

The biggest transgression that occurs on Diaspora is the mixture of Arab, Turkish and Jewish styles. In among the Arabic string arrangements and rhythms can be heard the echoes of the saz (a Turkish lute) and little whispers of klezmer (the Jewish folk music of Eastern European origin). It is a subtle acknowledgement of the close links between the cultures of Eastern Europe, Greece, Turkey and the Middle East. All the musics from these regions share similar tonalities and instrumentation. (When he was growing up in Greece, Dubulah used to listen regularly to Egyptian music.) By way of illustration, Atlas talks about the Israeli women that she met at Christmas. "They were wearing headscarves and they looked no different from Arabic women. Their Hebrew was more Arabic sounding. They were totally Middle Eastern, you couldn't tell the difference. . . I hope you get that flavour in my music."