Timothy Spall peers through the front door of his south-west London home. It is a chilly Friday night and curtains are drawn, shutters firmly closed. He shows the way to a large, farmhouse-style family kitchen and offers wine. He introduces Shane, his wife of 25 years, and decides it will be cosier to sit and chat in the study. Here books and DVDs line the walls: classic novels, hefty art exhibition catalogues, recent leftfield and mainstream films.

He sits at one end of an L-shaped sofa. He wears a stripy shirt, a dark blue jumper, a dark blue tank top, dark trousers, soft grey slippers. He is smart, articulate and funny. He can be serious but a deep, infectious laugh is never far away. Brought up on a council estate in Battersea, his London accent still helps define him, although every now and again he sounds like a posh actor.

Spall is an acting institution, a yardstick by which to measure other actors.

When he adopts an American accent, he seems unwittingly to become the great Philip Seymour Hoffman and, indeed, he is equally gifted. Spall has an OBE but call him a national treasure and he'll say it makes him feel like the Queen Mother. His skill is to work out why people are the way they are, what goes on inside their heads and deep in their hearts. He used to be a bit of a show-off, turning up to his first day at the Royal Academy of Dramatic Art with hand-painted platforms then wearing eccentric hats and waistcoats to early interviews.

He was mocked at Rada for his south London accent and physical appearance but left as a prize pupil. Someone wrote "Spall is a fat git" on a wall at Rada but underneath was the response: "Yes, but he's playing at the RSC [Royal Shakespeare Company] and you're not."

In the 1980s, Spall co-starred in the television series Auf Wiedersehen, Pet as Barry the Brummie biker nerd. He was so convincing that for almost a year after the show ended he failed to find work.

Now, at 49, Spall takes time off only when he chooses to. Since appearing in Rock Star and Vanilla Sky in 2001, he has developed a sideline as a Hollywood actor, returning for The Last Samurai and Lemony Snicket's A Series of Unfortunate Events. He has also appeared in two Harry Potter films and a new run of Auf Wiedersehen, Pet. Yet Spall has, perhaps, always been at his best with director Mike Leigh. They have worked together for 25 years and Leigh says unequivocally that Spall is "one of our greatest actors".

Which is not, of course, to say that Spall's talent for what Leigh calls "a great sense of the world and of gravity" is restricted to one director. Far from it. In fact, his ability to feel what it might be like to be someone else allows him to be flexible. This month he appears in Pierrepoint, taking the title role in a film about Britain's most prolific hangman and The Street, a BBC drama by Jimmy McGovern in which each episode tells the story of a different house in a northern, working class street.

In Pierrepoint, Spall brings a depth to the ordinary yet enigmatic man who hanged large numbers of Nazi war criminals convicted at the Nuremberg trials as well as Ruth Ellis, the last woman to be hanged in Britain.

In The Street, he plays taxi driver Eddie, a hopelessly kind family man who picks up an asylum seeker and ends up offering him a sofa for the night. As Albert Pierrepoint, his eyes, usually a startling blue, seem to turn black; as Eddie, his shoulders droop and his face takes on a hang-dog expression. As both characters he is superb.

It seems strange that Spall hasn't worked with Jimmy McGovern before; the creator of Cracker and The Lakes writes just the sort of gritty realism injected with dark humour that appeals to the actor. "I've always relished Jimmy's stuff," explains Spall. "He just always crosses that line of comedy and tragedy, which I really like. He's not scared. He goes there and makes you feel a bit uncomfortable. Episode one could've been a slightly tacky story about wife swapping but instead it's quite fun and a bit rude."

He sips his wine. "People like Jimmy and Mike [Leigh] are preoccupied with people who never get a real shot at life. They never get the chance. They're not at the centre of most dramas. Really good drama is about people acting out the consequences of what's happened in their lives; I adored the film Crash because it's about strangers arguing with each other because something awful is going on in their lives."

If acting is about empathy, then great acting is about not just playing a role but becoming a character. Spall recalls a defining moment in his life, a year before he took on his first acting role as the lion in his school production of The Wizard of Oz. "When I was about 15, my grandma would come over on a Sunday and it was my job to walk her back through the catacombs of the council estate to make sure she was OK. After I'd dropped her off [one day], I saw an old man walking along and without realising it I started to walk like him. In doing so, I started to understand what it might be like to be this old bloke. It wasn't a case of thinking what his life might be like, it was a sensation. I was feeling it."

Spall laughs, only too aware that dissecting the finer points of acting can sound a little pretentious. I ask if he watches people because it might be useful in a future role or because it's instinctive. He doesn't have to consider the answer. "Instinctive. Totally. I might see someone and say to Shane 'I could play him.' Or I'll do a 95-year-old woman just as a gag. It's one of my favourite things. It's become increasingly difficult to do, though, not being anonymous any more . . ."

With his work in America (he is off in the morning to start on a new Disney project) and with Harry Potter, Spall is no longer a leftfield actor. As it seems to have no effect on the work he really cares about - he has been fascinated with Albert Pierrepoint since reading his autobiography at 16 - Spall is enjoying his new position. It has, I suggest, taken a long time; he will turn 50 next year. He laughs. "Fifty is the new 30! It certainly doesn't bloody feel like it."

Is he worried about turning 50? Truthfully? "Oh no," he says, lifting the glass of wine. "I think it's a bonus. If I start wondering who that old man in the mirror is, I just have to think about going through that illness. Getting older is just better than the alternative. Hahaha."

It will be 10 years next month since Spall was diagnosed with leukaemia. When I interviewed him five years ago, he talked tentatively of his experience - "I had to face up to . . . oblivion" - and of the terrible possibility of leaving behind his wife and three children.

Now there is still fear in his eyes when the subject comes up but it's fading. Will he be given the all clear next month? "It's a tacit thing. It's called remission. It's a bit like being an alcoholic; you're a recovering alcoholic until the day you die. With cancer, they suggest that after five years of being clear, if you are going to die it may be something else that kills you." He laughs but looks uncomfortable.

"Ten years is going to be a great anniversary. I know exactly when I was diagnosed, to the day. We won't have a huge shindig, but it's very important Because it was a horrendous, horrendous adventure."

He says the "adventure" helped his acting. "There's nothing like a slice of true suffering to make you understand . . . It's my job to connect with someone when they're in extremis. I don't want to canonise myself here but if you've had a peek over the parapet into the abyss, it certainly makes you understand a character who's in a great deal of emotional trouble." A pause. "However, I want to be regarded for my work, not for the fact that I'm interesting because I've been ill."

Timothy Spall's legacy will always be his body of work. And, perhaps, the simple but important fact that he's a nice bloke. We're lucky that he didn't become a soldier after years in the army cadets as a teenager (and so is he: "I'd have been the worst soldier in the world"). He says he needs to act but will always put his family first. He is very pleased with the way his kids have turned out, although he misses the young granddaughter who now lives in Australia. He glows with pride when discussing his 23-year-old son, Rafe, who recently appeared on the BBC4 drama The Chatterley Affair. "When he told me he wanted to be an actor at 14 or 15, I was both flattered and horrified. But he's having a good run." Another smile. "And he's a good-looking guy, too . . . he must be a throwback!"

It's getting late. Spall has to be up early for his flight to America. We finish the last of the wine. Does he still feel nervous about new projects? "Oh yeah! Right now I'm thinking, 'I don't want to go!' But I'm also very excited. The Hollywood thing didn't really happen for me until middle age. So I didn't have to go in there and be disabused of a certain rose-tinted view. I went in there thinking 'I'll just see what it's like.' " He leans back in the sofa and smiles. "Nothing to lose, everything to gain, everything to enjoy."

"Pierrepoint" is out now. "The Street" starts on BBC1 on April 13