Kicking around inside the strange world of Colin McNaughton can do odd things to the mind. Peter Dickens, a foundation art and design student at Newcastle College, found himself haring off to the Co-Op funeral parlour to scrounge a few coffins in which visitors could sit and read during an exhibition based on McNaughton’s work which opens next week.

Peter is one of a group of foundation students working with the sculptor Richard Broderick who, like McNaughton, grew up in Wallsend, Newcastle. Together they have created “sets” for the author’s illustrations and text which will be housed in Newcastle upon Tyne’s cavernous Discovery Museum.

The national Centre for the Children’s Book, which is due to be built in the city, is organising this exhibition - its first - as a showcase for ways in which children’s literature can be explored and promoted. So instead of looking at illustrations hung in frames against white walls, visitors will be invited into a variety of McNaughton’s fictional “worlds”: a Dracula room - hence the coffins - based on McNaughton’s new book Dracula’s Tomb (Walker pound;10.99); a “pig school” for the Preston Pig series; a pirates’ room largely comprising the deck of the Jolly Roger with regular appearances from Captain Abdul; an Aliens room which will be entered through the door of a spaceship; a 40-feet-high giant’s library which visitors will enter through a hole in a giant wainscot.

All this will give McNaughton’s work the theatrical setting he believes is necessary. He regards himself as an entertainer, creating theatre in book form in which he is the designer as well as the director and playwright.

Colin McNaughton, the son of a shipyard worker and a school dinner lady, was brought up on comics and his work retains the humour, speed and theatricality of comic strips. The exhibition title, Daft as a Bucket, is a tribute to Dudley D Watkins, creator of comic characters Desperate Dan, Lord Snooty, Biffo the Bear and Oor Wullie (“a little Scottish working-class boy who spent much of his time sitting on an upturned bucket inventing stories,” McNaughton recalls, acknowledging his debt).

Adults may be tempted to interpret his work - for example Preston Pig inhabits a world fraught with danger and anxiety; Have You Seen Who’s Just Moved in Next Door to Us? (Walker pound;7.99, pound;4.99) explores the oddball in all of us - but McNaughton seeks principally to entertain, as comics entertained him. However, we must not forget, as critic Brian Alderson points out in his introduction to the exhibition’s companion book, that what gives McNaughton’s books their energy is “the mastery of drawing that underlies them”. He is also a wordsmith, adept at improbable associations.

The book, which features McNaughton in dialogue about his characters and books, is as intriguing as it is informative - an invaluable insight into the creative process and particularly into the ways in which he interweaves pictures and words and plays games with them. At one point he states: “In good picture books (pictures and words) are inseparable. There should come a point when you’re not aware that you’re reading words or looking at pictures - you’re just experiencing the story.”

It seems appropriate that the Centre for the Children’s Book should choose the work of a son of Newcastle for its first exhibition. McNaughton believes that an exhibition which celebrates illustration as well as text is also appropriate for the centre’s contribution to the National Year of Reading.

“Children can take words and pictures in simultaneously. I throw millions of things into my books because kids have no problem with that. They can watch telly, eat breakfast, read a magazine all at the same time - but they have to be engaged first.”

McNaughton has been a leading supporter behind the bid to establish a Centre for the Children’s Book in Britain. “Britain leads the world by a mile in producing children’s books but has nowhere for its writers or artists to deposit or show their work,” he says.

So far the Centre, which will cost pound;10 million to build and equip, has been given a Newcastle city council site worth pound;1 million and Northern Arts is promoting it for a second injection of lottery funding as one of its chief Case for Capital projects.

Publishers have pledged hundreds of thousands of pounds to the project and the Robert Westall charitable trust has promised pound;100,000 towards capital costs. More than 90 authors and illustrators have offered original work including Quentin Blake, Philip Pullman, Tony Ross, Michael Rosen, Joan Aiken and Anne Fine.

Apart from a national archive with books and original collections of manuscripts and artwork, the centre will also house exhibition spaces, a studio theatre, education workshops, a bookshop, an interactive communication centre and a cafe.

Elizabeth Hammill, the project director, is also determined that the building will be architecturally striking. She says: “We want something contemporary and exciting. A kind of Pompidou Centre for children.”

‘Daft as a Bucket: Inside the World of Colin McNaughton’ will be held at the Discovery Museum from October 13 to November 21. The programme includes free performances of McNaughton’s ‘Watch Out for the Giant Killers’ adapted by Acting Up (North) Theatre Company and a series of workshops for schools. Further information from: The Centre for the Children’s Book, Pendower Hall, West Road, Newcastle upon Tyne, NE15 6PP. Telephone 0191 274 3941.The ‘Daft as a Bucket’ companion book is pound;4.99 (inc pamp;p) from the same address. Teacher’s pack also available. ‘Dracula’s Tomb’ is published by Walker pound;10.99. The latest Preston Pig book, ‘Hmm...’ is published by Andersen pound;7.99