Peter Saville: the UK's most famous graphic designer

Peter Saville is, he says, an extremely busy man. At 57, he is about to be awarded the prestigious London Design medal, recognition of his status as the UK's most famous graphic designer. The award brings with it "a lot of attention – I thought they were just going to give me a medal," he sighs.

He is also flying to New York for a Yohji Yamamoto show on which he has collaborated, despite his open contempt for contemporary fashion. He has emblazoned the collection with the words "Meaningless excitement" and "For further advice please contact our fashion advisors". Saville says Yamamoto didn't even flinch at what he calls his "slightly facetious stance".

To hear a man who has been so heavily involved in the industry – as well as Yamamoto, he has worked with Jil Sander, John Galliano, Christian Dior, Stella McCartney, Raf Simons and Kate Moss – claim the whole business is an exercise in "mass mind control and triviality that enslaves people to consumption" comes as a shock. Yet it is virtually the first thing Saville says to me when I walk into his studio/home in Clerkenwell, London.

It is not as if this is a great revelation, the cry of a man gradually disillusioned by life amid the rag trade's ugly swirl, he points out. Earlier this year he was asked to come up with a design to celebrate Lacoste's 80th birthday. "They said: 'Do anything you want, but don't touch the crocodile logo.' So that's what I did: destroyed the crocodile. Digitally shattered it in 80 different ways." He shows me the resulting shirts. "A completely fucked crocodile," he laughs. "I felt I had to do it because of this sort of brand obsession. People talk about brands and it's awful. You can sell anything with a logo on. That needed to be questioned."

The stuff about fashion turns out to be a characteristic Saville answer. It is both extremely long and a little contradictory. He may be celebrated for his work, but he claims he never really wanted to be a graphic designer in the first place, and in any case has "sort of retired or disengaged from" the job, apparently mortified by its commercial aspects. "I remember sitting in a meeting and there was an impasse, and the man at the head of the table said: 'Relax, we're all just here to make money.' Actually, I'm not here to make money. I'm here to try and make something better. The idea that people are only doing things to make money, and actually there are no values in it whatsoever, will adopt whatever position is necessary for that goal, that has nothing to do with what I ever did."

Given a retrospective show at the Design Museum in 2003, Saville says, he "put a piece on the wall that said: 'Be careful what you wish for'" and closed his studio. "I'm not running an agency," he says. "I don't have an agent, I'm not actually looking for work although I need to do a bit, because it's expensive and difficult being on the ground in London."

Retired or not, in 2013, his name is pretty much the only one in the field that might spark a flicker of recognition in someone who does not have membership of the Design Museum and an ongoing subscription to Creative Review. Yet the designs on which Saville's reputation rests are all between 25 and 35 years old: the diagram of a pulsar's radio waves on the cover of Joy Division's Unknown Pleasures and the stark photos of tombs on their album Closer and the single Love Will Tear Us Apart, that seemed to take on an eerie, precognitive power after the suicide of singer Ian Curtis; the die-cut replica of a floppy disc and the reappropriation of Henri Fantin-Latour's A Basket Of Roses that housed New Order's Power, Corruption and Lies. Furthermore, they are all record sleeves, "a dead art" that he says he had no interest in pursuing after the age of 30.

He is clearly enormously proud of his work in recent years as creative director to the city council of Manchester, his hometown. His explanation of what the job entailed is an epic, even by his standards – a fascinating and rather beautiful stream of tangential ideas that variously takes in the condition of the post-industrial city, how bankruptcy can turn your value system upside down, the difference between a waste of time and an abuse of time, Professor Brian Cox, the Manchester Art Treasures exhibition of 1857, how London isn't really the capital of Britain any more but "an independent city state", and the Labour MP and historian Tristram Hunt.

Alas, at the end of it, I have no idea of what he has actually done, beyond attending a lot of meetings and coming up with the phrase "Original Modern", which he apparently refused to allow the city to use as a slogan. The council ended his contract in 2011 and, with the best will in the world, you can see why.

It is all rather confusing, although in fairness, Saville seems as bewildered as I am. He's arrived at the interview with a series of handwritten notes, which seem to represent a concerted effort on his part to work out what he is, or thinks he is, or wants to be: despite referring to them, he keeps laughingly sinking his head into his hands as we talk.

His problems really began the moment he approached Tony Wilson at a Patti Smith gig in 1978, he says. Wilson was in the process of starting Factory Records, and Saville had been intrigued by record sleeves since buying the British edition of Kraftwerk's Autobahn. Factory spoilt him, he says. "It wasn't a company, it was an autonomous opportunity that just occurred for us in Manchester, manifested by Tony. He had a job in broadcasting, so he didn't need to make any money. It was what you'd call a folly, a collection of individuals doing exactly what they felt. No one was answerable to anyone."

The bands never told him what to design, he says. Joy Division were too busy trying to work out how to play their instruments, and when they regrouped after Curtis's death, New Order were too busy arguing with each other. "I was left to my own devices and it turned out that I had my own agenda. In no other circumstances would that happen. If I'd gone into any other kind of design practice, forget it."

It left him hopelessly underprepared for the realities of life outside the Factory gates, so to speak, a state of affairs not helped by the fact that he appeared to inherit not just Wilson's idealism, but his legendarily appalling business sense. In 1986, Saville could command £20,000 to design an album sleeve for Peter Gabriel, but three years later he was virtually bankrupt.

An attempt to join a more standard graphic design agency went as you might expect, given Saville's aversion to commerce and being told what to do and, indeed, deadlines. An attempt to start a multimedia practice in Los  Angeles in 1993 was even less successful: he left after a couple of months. He found himself broke, reduced to visiting record labels in the hope that they would give him free albums he could sell at a secondhand store.

"I had $3 the day of the big earthquake in LA in 1994. Literally. That was new for me, from an affluent, spoilt, middle-class background. I needed $20 each day to drive the car – because there's driving to do in LA – and to eat. And it's very difficult when you need $20. People who were" – he makes air quotes – "friends would make you wait all day for $20. It was probably good for me. Find out what it means to have no money."

Eventually, he made it back to Britain, convinced he was "the last big thing", only to discover that, amid the climate of reverence for the past engendered by Britpop, he was once more in demand not just by bands including Suede and Pulp, but by the fashion industry.

He should have ascended with ease to the role of the grand old – or at least middle-aged – man of British graphic design. His early designs have worked their way into the fabric of British life – in 2010, the cover of Power, Corruption and Lies made its way on to a first-class stamp. But he seems surprisingly equivocal about their iconic status, concerned that they have become divorced from their original meaning, from "the authenticity" of Factory: "You see them used to sell Airmiles or text message minutes." He mentions "the total car crash catalogue of disasters" that was Disney's attempt to market a T-shirt with Joy Division's Unknown Pleasures cover turned into Mickey Mouse's head. He shows me a T-shirt featuring the same image, with the slogan: "WHAT IS THIS? I SAW IT ON TUMBLR." "It's brilliant, isn't it?" he says, smiling. "Profoundly clever."

For all Saville's contradictions and professed difficulties, I am not convinced that he isn't secretly happy in what he describes as "the interzone between things", blessed with a reputation that enables him to ignore briefs and cause trouble. He gives the impression that he rather enjoys it.

Just before I leave, he tells me about his 2010 commission to redesign the England football shirt: he came up with the idea of multicoloured crosses of St George. "The red and white thing has been entirely marginalised by one kind of person. It's synonymous with an attitude that is naive, xenophobic, bullying and self-marginalising. I thought, that's not reflective of the team, or football, or of the nation at all. But it turns out the market for those shirts are those bloody-minded xenophobic individuals with the shaved heads. When it came out, they did not like it. They did not like it at all."

He laughs in manner that doesn't sound rueful or abashed so much as delighted. "Oh yeah," he nods, still laughing, "they fucking hated it."

Peter Saville will be in conversation with Paul Morley at the Global Design Forum on 16 September, as part of the London Design Festival, 14–22 September. www.londondesignfestival.com