Villa La Californie. No one could possibly have imagined the world that existed behind that old wall and infrequently opened iron gate on a quiet lane above Cannes,” reminisced David Douglas Duncan about the sumptuous belle-époque mansion that Picasso acquired in 1955. He moved there with Jacqueline Roque, the lover he had recently met at the Vallauris pottery studio, and new house and new muse together inspired a rich, distinctive period in his work that is often overlooked.

Marooned between grey, postwar Picasso, figurehead of the left, and death-defying late Picasso, the La Californie years appear as a lyrical, light-hearted interlude. Brigitte Bardot was up the coast inventing St Tropez; Picasso was wealthy, famous and effortlessly expressive, but not yet old and savage. The truth, of course, was more complex, and is intelligently explored in Picasso La Californie, a sharply focused exhibition, opening next week, which is a dazzling showcase of this epoch.

In Helly Nahmad’s large, bright,
single-room gallery, 20 works from private collections depict the vast main studio, with Jacqueline in her rocking chair, Jacqueline in oriental costume, Jacqueline as one of the women in several variations on Delacroix’s “Femmes d’Algers”. All recount how, as soon as he moved into La Californie, Picasso took possession of the new space and the new woman through paintings and drawings.

La Californie’s gaudy opulence, and its prevailing linearity – wrought-iron staircase, tall windows with art nouveau tracery, terraces lined with palms and eucalyptus trees – imposed a stylistic unity on paintings that are detailed, assured, harmonious and stable. In many works called “L’Atelier” from 1955-6, light filtered by palm branches floods through windows towering high like a cathedral nave, to illuminate the studio and contrast with cool recesses that lead the eye deep into the picture space, past furniture, sculptures and easels. Picasso called these “interior landscapes” for the way they simultaneously suggest indoors and outdoors. But a prominent feature of several here is a fresh, blank canvas in the centre, implying that the real subject is the artist at work.

In each case, the pure white empty space stands out from the busy clutter of the rest of the picture – particularly from the gorgeous baroque swirls of “L’Atelier” of April 1 1956, where the garden’s pink-green hues gleam beyond the grey-blue studio. Through such pictures within pictures, argues the Picasso scholar Carsten-Peter Warncke, the artist “grants us access to the very essence of the creative process. Picasso is showing us his power. He can make a world out of nothing.” His concern with creativity and power is underlined here by two monumentally simplified works composed of bold, stark outlines: “Enfants dessinant”, where his children Claude and Paloma, the boy enclosed in a slab of blue, the girl in red, are engrossed in drawing, and “Minotaure”, a human/bull head whose mask-like ferocity anticipates the final self-portraits.

Seen together, these paintings immerse you utterly in an art that, although its striking external features were shaped by the villa itself, signalled a new interiority and self-reflection in Picasso’s work. For the enchanted world of La Californie represented more than a withdrawal from public life by an ageing artist. Picasso was 74 in 1955 and a celebrity, but this was also the first time since 1900 that he was no longer at the centre of contemporary art-making. Abstract expressionism now ruled: an art that, in its privileging of emotion, anti-intellectual methods of painting and dismissal of the human figure, was antithetical to his own. No longer stimulated by modern currents, he turned within, to his own past and to art history.

Simple, masterly representation combined with paraphrases of cubism shape everything here. The “Demoiselles d’Avignon” especially – a huge tapestry version of the painting hung at La Californie from 1958 – looms behind the “Femmes d’Algers”, where Picasso twists human figures apart into blocks and lines in order to put them back together in theatrically stylised, abstractive forms, as if dramatising the very act of painterly construction.

The variations on Delacroix were the first of a long series commenced during the 1950s, when he attacked art history – Manet’s “Dejeuner sur l’herbe”, Velázquez’s “Las Meninas” – with the cannibalistic fury that had made young painters in the 1910s and 1920s frightened to show him anything, knowing that within hours he would devour and regurgitate their ideas, better and more coherently, on his own canvases.

Now he had no living artist to raid. The browns and golds of some studio pictures nod at Braque’s subdued palette – Braque, the old cubist ally, declined the offer of the top floor at La Californie – but, more significantly, the “Femmes d’Algers” incorporate a posthumous dialogue with the greatest of Picasso’s contemporaries, Matisse, who had died in 1954.

“He left me his odalisques,” Picasso joked, and the oriental mood and chromatic range here is pronounced. The chapel-like forms of “La fenêtre de l’atelier”, all saturated reds and yellows, suggest a deliberate homage to the French colourist. In the magnificent “Femme accroupie au costume turc”, Jacqueline in blue against a crimson pattern of Moorish tiles recalls at once Matisse’s oriental fantasies and the exaggerated, melancholy features of Dora Maar in “Weeping Woman”, yet is still emphatically herself.

“She resembles her portraits: a typical Arles beauty, a Roman locket with an aquiline nose,” wrote André Malraux. Indeed, the miracle and tension throughout this show is that however Picasso deforms or abstracts her, Jacqueline’s long, still, straight face, dark eyes, arched eyebrows, perfectly straight nose and pouting lips remain distinctive – totemic, but also a triumph of figuration and of Picasso’s human understanding. “Her silence filled their home – and her face his eyes,” recalled David Douglas Duncan. It is impossible not to notice that Jacqueline, for all the strength and serene rigour of her poses, is a depressive; after Picasso’s death she committed suicide.

This is a rare chance to see top Picassos in a city that is not richly endowed with them, and an example of the increasing role of London’s commercial galleries in mounting art-historically relevant shows. Picasso La Californie opens as several important museum exhibitions in America and Europe this autumn re-examine later Picasso and his impact in the mid-20th century: Picasso Painting Against Time, currently at Vienna’s Albertina, transferring next year to Düsseldorf; Palazzo Grassi’s Picasso 1945-1948 in Venice; Picasso and American Art, at the Whitney Museum, then in San Francisco.

The selection at Helly Nahmad is poignant, optimistic yet elegiac, and highlights a nostalgia of which Picasso was well aware. Here we see him negotiating his place in the great European tradition, painting in response to past and future. The Mediterranean becomes a last site of classicism and modernist pleasure – referenced in the playful “The Diving Board” – as both are on the wane. The studio is the place where, from Vermeer and Velázquez to the mid-20th century, the painter’s individual experience of the world was self-consciously transformed into art. What resonance do these themes have after Warhol’s factory and the democratic impact of public art such as Carsten Höller’s slides at Tate Modern? As its historical position shifts in relation to our own times, this period of Picasso’s work becomes ever more interesting, and makes this beautifully orchestrated, thoughtful show unmissable.

‘Picasso La Californie’, Helly Nahmad Gallery, London W1, from November 28 to February 28, tel 20 7494 3200

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