With the exception of maple syrup, Margaret Atwood is Canada's best-known export. Writing novels and poetry since the age of 16, Atwood's work has featured themes of Canadian national identity and feminism. She is best known for her novel The Handmaid's Tale in which she created a futuristic dystopia where a woman's function in society has been relegated to one purpose: to breed.

Attwood gave three talks at Hay-on-Wye, a literary festival tucked away in the Welsh countryside. It is an oddball event, now in its nineteenth year, where lots of literary types convene in a muddy field for two weeks and talk about their work, current events and sup on welsh sheep ice cream and other local delicacies.

Atwood's manner of talking is surprisingly deadpan. She likes to crack jokes but remains straight-faced, apart from a trace of a knowing smile. Her startling woodenness exacerbates her wisecracks: 'I remember coming to Hay when it was just two tents in a field of mud…and now it's a whole bunch of tents in a field of mud.'

She is here to talk about her new novella. The Penelopiad is part of a myths series which was commissioned to twenty different writers. Each was asked to pick a myth and rewrite it in any way they pleased. Atwood struggled to find a suitable myth, at first hoping to pick something from her native country. Eventually she settled on Homer's Odyssey and boldly gave Penelope the main narrative voice.

The original epic poem is the tale of the Greek hero Odysseus and his decade-long journey back to his native land of Ithaca after the fall of Troy. He is returning home to his wife Penelope who he had won in a race. Penelope has a secondary role in the original poem, but in this version she gets front stage, telling her life story in Atwood's dry sardonic prose. From the Underworld, Penelope tells of life without her husband, of her problems with her moody teenage son, Telemachus, and of having to fight off unruly suitors who are really only after her kingdom. Her main grudge in life is that Helen of Troy (her cousin) is more beautiful than her. Penelope has always consoled herself as being the clever one.

In the first of her talks, Atwood read from the Penelopiad, picking passages which show Penelope at her prickliest.

How important was it to give Penelope a female voice?

'Yes, of course. There is a myth that the Odyssey was written by a woman. Women are given quite a large part in the story and all the male suitors, who are bad, die. But you can't really tell if the original is told by a male or a female voice.'

She adds as an afterthought:

'I always advise male writers to check with women (if they are writing female prose) - that is not how you put on a pantyhose! I wrote as a male once and was given two tips, the first was on swearing and the second was how to roll and smoke a joint in company'.

Would she write another myth based book?

'Maybe. The advantage is that you don't have to think of a plot. The material is there already. Every writer draws from mythology and biblical stories without even knowing it.'

In this novella, Atwood has given one of the world's oldest tales a feminist make-over. By giving Penelope the voice, she shifts the balance of power in the story. In the poem, it is Odysseus's bravado and skills of deception which are explored. In Atwood's version, Penelope's tools are humour and cunning, which she uses to survive without a man in a man's world.

The Penelopiad (Canongate) is out in bookshops now.