Of Time and the City is an idiosyncratic and deeply personal documentary essay, which draws on vivid archival footage and some inspired musical selections (everything from Mahler to Peggy Lee), it's narrated by Terence Davies, who peppers his commentary with quotations from his favourite writers (TS Eliot, AE Houseman, Chekhov), his tone ranging from the affectionate to the sarcastic, the melancholic to the outraged.

However, when Davies was initially approached by the producer Sol Papadopoulos to make a low-budget digital film to commemorate Liverpool's status as a European City of Culture, he turned down the project. 'I said "No"', explains the 63-year-old filmmaker. 'I didn't want to do any more fiction films set in Liverpool. I said what might be interesting to do was a subjective documentary about the Liverpool I knew, until I left in 1973. My template would be Humphrey Jennings's Listen to Britain (1942), which doesn't spell things out and in only 19 minutes captures the essence of being British. I made it clear that the film would be a subjective vision. That's why I don't mention the Toxteth riots: I didn't live there and it didn't have any effect on me. What people of my generation don't realise is that that when you grow up in a city like Liverpool, you only knew your little environment and nothing else. Toxteth was far away.'

Returning to a city he'd left some 35 years earlier was a 'strange experience' for Davies. He recalls walking past what used to be a post office on Victoria Street, where he used to buy insurance stamps in his first job as a shipping clerk. Now it's a shopping mall, whilst his parish Catholic church, which seated some 2,000 worshippers, today attracts just a handful of regulars.

Davies admits that there is so much he doesn't recognise about today's Britain - he bemoans the decline in manners, the way the English language is treated 'with such contempt', the lack of respect for cinema, and the subservience to American popular culture. It's contemporary pop music though for which he reserves his greatest scorn. 'I really do detest it', he exclaims. 'It's commercially grotesque noise, performed by people of no discernible talent. The lyrics are so banal. Who cares about Amy Winehouse or George Michael? A minor song by Cole Porter or Lorenz Hart is infinitely superior.' Even the Beatles are summarily dismissed in Of Time and the City for resembling a 'firm of provincial solicitors.'

Yet, to quote Peter Mandelson, Davies is a fighter, not a quitter. He has three features in the pipeline, including a present-day romantic comedy set in London and Paris and an adaptation of the 1930s Scottish novel Sunset Song. Before making Of Time and the City, he feared his career was over.

'Now I feel worthwhile again. I've got a few more things to say and I'd like to say them. I'm 63, and I think that making those three films will be enough. Then I won't mind stopping.'

Of Time and The City is on selected release from Fri 31 Oct.