Very masculine, but angry

She packed him and his belongings into her car and delivered him to his father's house in Chelmsford, where, without too much fuss, he settled in and finished off his schooling, doing rather well, especially in art.

For those seeking deep meaning in the Turner Prize-winner's pottery penises and overt sado-masochistic imagery, this part of his early life might yield few clues. Despite his claim to a tormented childhood, the real problem seems to have started in his late teens. This was when Grayson, the school swot, the responsible budding Army officer, discovered he wanted to be a transvestite.

"The initial reaction from my father was to send me to the doctor to get cured," he told us. "But my stepmother threw me out of the house."

At 19, studying fine art in Portsmouth, he came out as a transvestite. A very masculine, heterosexual and rather angry transvestite.

"The anger was tremendous. He really had a lot of edge when I first knew him." This was the view of James Birch, the gallery owner who is credited with discovering Perry's artistic potential. Birch became a close friend and bought a number of Perry's early works.

"The ceramics were so brilliant," he said. "You could see they were special. He needed an outlet for all that anger. I don't really know where it came from - you'd better talk to him about that - but I know he was conscious of the fact that being a tranny upset his family.

"But that's just him. I remember being on the top of a bus with him once - people couldn't work out what he was. He was staying with me in Suffolk one Christmas and the local farmer invited us over for a drinks party. Well, you can imagine the impact he had, in his frock and make-up, on that sort of gathering. The farmer had a teenage daughter and I think she was very, very confused. I think he loved it that no one dared to ask him if he was a man or a woman."

It is a question he doesn't ask himself, of course. While many transvestites might agonise over the possibility of a wobbly chromosome, Perry, 43, declares himself "straight". He has a wife, Philippa, who is a psychotherapist, and an 11-year-old daughter, Florence Boudicca, who, when asked what sort of art her father did, replied: "Child abuse. That sort of thing."

Florence's friends have become used to seeing her father in the guise of his alter ego, Claire. This creature, with padded hips and pencil-eyebrows - a Camilla Parker Bowles bob and crimson lipstick - has her own room in the handsome three-storey Islington townhouse that is the Perry family home.

Claire was created when Perry joined a cross-dressing club as a young man and, to conform to the rules, had to give a pseudonym.

Now she has a life of her own. She has her frocks made by a dressmaker in Forest Hill, who decorates them to Perry's order, she attends art openings and window-shops on Oxford Street. She is the feminine construct of a perfectly male man. It is, Perry would have us believe, all good clean fun.

But there is a sexual dimension is his dressing-up. " People ask why I do it," he said. "Well, it's a turn-on." In the large, comfortable room of the Perry house that his wife uses as an office for her psychotherapy patients, he talked frankly about the transvestite element of his life. Dressed in a very masculine dark brown cord suit, with basketball boots and a T-shirt, he is the very image of a rather fashionable and fit Islington man.

"People are very uncomfortable with transvestism," he said. "But I think it's all about their own fears. They don't like difference, especially when it is about sex. Some trannies say there is no sexual thrill for them and I believe them. But for me it is definitely a turn-on."

Despite the element of excitement, he believes his transvestism can be conducted within the framework of his family without adverse effects.

Indeed, he said, his first date with his wife-to-be was at a tranny club. "I remember it well. We agreed to go and she was all dolled up because she thought it was some sort of drag party. But she came to my door to pick me up and, when I answered it, she didn't recognise me.

She thought I was my mother."

What was her reaction ? Philippa says: "I was curious. I'd been divorced but I'd not known a transvestite before. I wasn't bothered then, and I'm not now. It has made no difference to our relationship.

"It's all part of him, part of the man I got to know and love. He's not gay, he just likes dressing up as a woman."

But what about Florence? "The three of us are a family, and we are honest with each other. The problems come when people aren't honest and have secrets. That's what causes damage."

So is this, finally, the clue to the deeper meaning? Was it Perry's own leanings - and not his treatment at the hands of others - that caused the trauma that has been so strongly identified with his work?

Janice Blackburn, a curator and writer, says it does not matter: "What Grayson has done is to bridge the chasm between craft and art. He is a craftsman and an artist. His work is lovingly handcrafted and, while he might walk around like Little Bo Beep, he does deliver the goods."

The "goods" have put Perry on the path to riches. His larger pieces already sell for £15,000 and, while the Turner Prize itself is worth £20,000, winning it will ensure that his work gains considerably in value.

The money will come in handy. He has to pay school fees, he is engaged in building a new studio outside London - and it is expected that Claire's Forest Hill dressmaker will be receiving some demanding new commissions.

His future as an acclaimed and materially successful artist seems assured. But what of his parents, the people who, rightly or wrongly, have been credited with creating the unhappiness that was his inspiration?

He doesn't know if they are even aware of his prize-winning success. It has been two years since he spoke to his father and nearly five since he spoke to his mother.