Generally, when a film director yells: "Cut!", any blood to be mopped up is of the tomato ketchup variety rather than your genuine O Positive. But let children's horror maestro Darren Shan on to the set and anything can happen. In his latest novel, when actors, film crews and the usual camp followers turn up at the abandoned village of Slawter, they believe they are there to make a horror movie in which humans take on and overcome an army of demons and monsters.

With Shan however, nothing is quite as it seems, even his name. Originally Darren O' Shaughnessy, a London-born Irishman, he deliberately truncated it nine years ago when he started writing horror for children, lest young fans should try to seek out his darker adult work. Though 33, he has a plump boyish face that skilfully conceals the tongue stuck firmly in his cheek. The idea for Slawter, the third of his Demonata series, came to him during a visit to the Harry Potter film set. (Daniel Radcliffe is a Shan fan and Darren and Jo Rowling share an agent, Christopher Little. ) "I wondered what would happen if I set a horror story on a film set, " says the selfconfessed movie fanatic who boasts a collection of nearly 4000 videos and DVDs. The result is a cross between an adolescent Stephen King and a merciless spoof on the Hollywood blockbuster. Both genres dwell on the interface between illusion and reality, so there are plenty of opportunities for macabre double takes. A mime artist screams silently as he dies. A scene in which a young bit part actor is dragged away by a monster has the watching crowd screaming in terror then laughing to cover their embarrassment. "They've remembered - this is makebelieve, horrific fun, a movie." But is it or have they been caught up in a reality show that would dwarf even the crassness of Big Brother? At the climax of the book we are confronted with dozens of monsters "spitting bile, oozing pus and blood, screeching and howling with malicious glee", as they embark on a killing spree. And kids will lap it up.

Why? "It's that jolt of fear you get on a roller coaster. Scary but fun. It seems very dangerous but really it's quite safe. Reading is the same. It takes them out of themselves and at the end of the scream, they can laugh at it." Though Shan's books are more about action than character development, children identify easily with figures like the bulky, clumsy, decidedly unheroic Grubbs Grady, who appreciates the home comforts of scrambled eggs and hot chocolate between bouts of terrifying combat with Lord Loss, who has writhing snakes where his heart should be.

Behind all the comic gore, there is a serious point, says Shan: "You may not come home and find your family has been slaughtered by demons [as Grubbs does in the first book in the series] but they might die in a car crash and you'd have to put your life back together. I like to get children thinking about death. These days people live a lot longer and not many children die, so most children have never been exposed to it. I want to help them deal with it."

Yet, though his books never promise a happy ending, they are far from bleak. Like the rites of passage his young readers have embarked upon, they are about children having the courage and confidence to confront their demons.

Shan's work also always retains a strong moral framework. In Slawter, he is withering about those who seek to present suffering as entertainment or even art and those who consume it. "We're coming full circle, back to the era when crowds flocked to the Colosseum to watch Christians being thrown to the lions. I believe that in our lifetime, we'll see a reality show where someone dies. People love seeing people suffer."

By contrast, Shan's central characters live by a strict code of conduct that abhors gratuitous violence. "I like the idea of living a good life that is so important for the Samurai and the Celts - the next book in the Demonata series is based on Celtic mythology and set in Ireland. In Arnie Schwarzenegger movies people are killed right, left and centre but, apart from demons, I never try to set up anyone as such a bad guy that it's OK to kill them."

This is a clue as to why Shan is so popular with librarians.His first children's manuscript (Cirque du Freak about a boy who is half- vampire) was rejected by many publishers before being taken by HarperCollins because many believed that teachers and librarians would object to it and kill the series. There's a teasing reference to this in Slawter when Grubbs lightly rebukes his Uncle Dervish with: "You'll scar me for life with stories like that". In fact, librarians loved Shan because here was the pacy, well-written horror story, whose heroes demonstrated loyalty and moral integrity. It was just what they'd been looking for to wean kids off Goosebumps and Point Horror.

Most of all, though, the same playground version of the bush telegraph that was originally the key to JK Rowling's success, worked for Shan too. In fact, a certain post-Potter fatigue with witches and wizards may have helped clear the way for the biggest resurgence in children's horror since Roald Dahl. Shan's 12-part quasi-autobiographical Saga of Darren Shan has sold 10 million worldwide.

The consequent riches have not had much impact on his phenomenal work rate. He continues to write the equivalent of ten pages a day, five days a week, while enjoying life with girlfriend Helen and following his beloved Tottenham Hotspur.

Meanwhile, the screen rights for the first three vampire books have been optioned by Universal Pictures and a script has been commissioned. Is there a futures market for fake blood? On second thoughts, what about a contact for the Blood Transfusion Service?