Life's looking up, Dame Harriet

Although friends had confidently predicted the fact in advance, Harriet Walter insists that it was a genuine surprise when her agent called to say she was going to be made a dame. "I said, don't be silly, I'm not a national treasure." But the letter duly arrived. "These are the sorts of things that you want your parents to be alive for," she says.

Walter is a slim person, with long hands that cradle a wine glass as though it's the most delicate thing in the world. What with one thing and another, she hasn't managed to eat all day, and is pale and keyed-up. Perhaps that exacerbates the wistfulness in her tone, the extraordinary sadness in her eyes that persists even when she is talking of happy things, the ragged vulnerability of her voice.

No parents, but she got the next best thing – her sister and her family, who live in Spain, happened to be in town, and came over to this small Georgian house in west London, and greeted the news with screeches of delight.

Walter, pleased though she might be, does, however, have a healthy sense of the ironies inherent in her elevation: that you are far more likely to become a dame if you do Shakespeare, even though the culture at large tends only to notice classical acting if some Hollywood stardust has been sprinkled on it; that her title has been awarded under a government that's asking the theatre world to look into more American methods of funding – ie corporate and private benefactors – "a route" she says with some anguish, "that I've seen in America leads to disaster and very narrow definitions of success", a route that would never have allowed her the career for which she has been honoured.

"I came up almost completely through the subsidised theatre. I have never been absolutely at the market interface, where I've got to sell my wares or die – I've always been protected from that. Not 100% of course – there have been lots of ventures I haven't been able to do because I'm not a star name, for instance – but I've been allowed to do an awful lot of other things that nobody knew whether they'd be good or not when we started." The subsidised theatre allows the space to experiment, to fail, but to then produce the hits that have made theatre one of the few British businesses to buck the recession, the hits that so often transfer to Broadway. "It's just . . . maddening. Have we got to demonstrate this all over again? Have we not proved it a million times?"

She is also quick to point out how lucky she feels, and grateful, still to be working at all. "What I do for a living is the thing I have wanted to do since I was nine" – so determined was she, in fact, that she turned down Oxbridge, only to be rejected in turn by five different drama schools before getting into the London Academy of Music and Dramatic Art – "and I haven't had much of a period out of work. There are lots of my peer group, particularly women, who have just not been able to keep going in the same way, and if you don't keep going, you start being overlooked and forgotten because you're not still in the game. There's so much talent wasted that way."

The fate of older women, in particular, is something she feels strongly about, and which she speaks up  about at every opportunity. She recently curated a show called Infinite Variety, composed entirely of photographs of older women. Some of the pictures were commissioned, others taken by herself; buoyed by the discovery of how "absolutely welcome the project has been for so many women. The generosity, the enthusiasm, the lack of vanity, the pleasure – the response has been so amazing from both people who looked at the pictures and people who allowed photographs." She is writing a book to accompany them. Many of the subjects protested that after a certain age they felt invisible; Walter says this is something she doesn't feel as much, because "my centre of who I thought I was was never very consciously about being beautiful or attractive – I think I'm one of those people who's actually grown into their looks". But she does have to come to terms with the fact that while "we all feel 16 inside, I have to sort of repackage myself. I'm no longer the young woman I was playing before, and I'm in a profession where that continuum that is me is irrelevant to most people – they're meeting me for the first time, seeing me for the first time, and they're seeing an old woman, so that's what I've got to start being."

But, unlike the Miriam O'Reillys of the world, she has the option. Theatre, film and television dramas may be cruel to the older woman, argues Walter, who has extensive experience of all three, but there is a significant difference between them and newsreading: while there is a naked prejudice involved in laying women off on the assumption that they won't be watched or listened to or carry any authority, even if they're reading out exactly the same prose as a man of the same age, the problem in theatre is the lack of parts: "We can't impose on creative people the instruction, 'you have got to write a part for an older woman'." Even the increasing numbers of plays written by women seem not to have parts "about the older woman. [She] is usually feeding into a story that is centred on somebody younger. And that means that we have to shrink to a more two-dimensional role than our actual lives are."

This is not to say that she has not been cast in some properly meaty, three-dimensional stage roles: Hedda in Ibsen's Hedda Gabler, Lady Macbeth, Cleopatra, Queen Elizabeth I in Schiller's Mary Stuart; Livia in Middleton's Women Beware Women, at the National last year. But the striking thing about these parts is that they are not modern, but from the classical repertoire; also striking, and she finds it frustrating to have this pointed out, is the degree to which these women's power and domination so often has such a nasty tinge. "I think what we're dealing with – another paradox – is that the classical parts offer a certain very exciting and demanding discipline, between technique and passion and style and command of the stage and sense of period, and all those extra factors that are a good challenge for an actor. At the same time, because they're classical, they're coming from a place where the role of women is narrowed, and if you have a woman of intelligence and power in another period, pre the vote, somehow it becomes a sort of imploding, malevolent energy, a controlling, manipulative energy. And my personal experience is so not like that – and I think my personality is so not like that – that I get frustrated because I would like to be able to express the warmth, joy, generosity, humour, the continuity of one's young self still being there, the giggly person that one is, the naughty person that one is, mixed with the wisdom that you've acquired – all that roundedness – I would love to play that person. It means I'm very seldom playing me, or playing close to my heart."

As well as her stage work, Walter has appeared in films such as Atonement and Ang Lee's Sense and Sensibility, and can currently be seen in the ITV drama Law and Order UK. "Acting is what I do with who I am," notes Walter in her engaging, forthright, often elegant book on acting, Other People's Shoes. (Amusingly pragmatic, often, too: "If you do have cross words," she writes, in a section on dealing with egotistical male directors, "you had better burst into helpless tears afterwards so that the director can feel manly calming you down.") Acting is also what she does with what she fears: "I think I have a deep-seated fear of being misunderstood. Or being misjudged. So I go into a profession where people decide a whole bunch of things and project a whole lot of things on to you, and it's completely out of your control. And that's kind of – that's some kind of nightmare."

This is further complicated by the degree to which research, for her, involves watching other people, and coming to conclusions about them that they, in turn, can't control – on the tube, say, or on the bus: "I just like watching people who really are not self-conscious, who aren't aware, because I fear that one could become too self-conscious, too artful, as an actor. Sometimes if you look at somebody, you can extrapolate from their exterior what might be happening in their interior. I'm nosy. And I'm fascinated by the fact that everybody sitting on the tube is the centre of their universe just like I am the centre of mine." And how, because of that, you could not know someone at all, ever. "You know – I lived with my mother all my life until she died, and I don't really think I knew her, because I was always using her as my mother, if you know what I mean."

Walter, whose family founded the Times newspaper, grew up comfortable in London, and then at boarding school, until she was asked to leave at 13, when her parents – a warm, volatile mother of Italian descent, and a father who, when he broke the news to his daughter that they were splitting up, added: "I'm sure I can rely on you to take it like a chap." She had a kind of nervous breakdown instead. "It's quite embarrassing to even remember – I think I just got very fanatical, very religious, I wanted to control my friends. I felt like the whole structure of my life was falling apart. I refused to go to lessons. I refused to go to meals – I just sort of, I tried to, um – live in my head. I went a bit – mad, probably.

"I won't describe the period when I was sort of being medically looked after – but after that, when I was deemed to be OK to go back into the world, I suppose one of the things that happened was that I – I spread myself quite thin. I didn't put all my eggs in one basket. It was a sort of survival mechanism, that I would be all things to all people, and so if one corner of the universe started to collapse, I'd have another one to jump on to. And it was about then that I started to act, which I don't suppose was a coincidence."

She has never felt quite so close to the bottom again, though the need for control led to a period of anorexia in her 20s, and "of course I've come near, I've had tricky times that I've had to get through, like everybody" – a particularly tricky period being during the various runs of Moira Buffini's Dinner, at the National and then in the West End, when her mother died, and her fiance, the actor Peter Blythe, was diagnosed with lung cancer. He died a year later; she still wears the wedding ring he gave her.

This is rather a bleak run of highlights for a life that, while occasionally lonely, has, she says, been full and fun and artistically satisfying. "And you know, I've found a much better love life in older age." She is now in a relationship with an American actor; they commute depending on where the work takes them. She turned 60 a few months ago, "and it's just nice to tell people that you can [still] have a wonderful new romance. Life's looking very up, just when people think it goes down."