There is a basement under Gay’s The Word bookshop, and at the far end is a room that’s a cross between a den and a bunker. The beams of the shop floor are overhead, the brick walls stand exposed, the furniture is second hand, and on the other side of the window tower the buildings of Bloomsbury. I am sat at table that looks as if it dates back to the Second World War. Across from me is the talented Clayton Littlewood, who in a little under an hour will deliver an engaging reading from his new book, Goodbye to Soho.

Goodbye to Soho picks up from where Clayton’s first book, Dirty White Boy, left off. That book started out as a blog that Clayton wrote when he and his partner Jorge ran the designer clothing store Dirty White Boy on Soho’s Old Compton Street. Dirty White Boy, which Stephen Fry described as “funny, perceptive, sexy, and exquisitely observed”, starts in August 2006 and finishes in November 2007. At the close the recession is seriously threatening business, and it absolutely cries out for a sequel. Goodbye to Soho covers the last 6 months in Old Compton Street, and continues the stories of the downright Dickensian cast of characters that Clayton met there. From the brothel madams upstairs to Angie, Chico, Leslie and Sebastian Horsley, this is a sequel that is even better than the original. It is a funny and deeply moving book from a first rate storyteller.

“I didn’t realise I was writing a book,” Clayton says of Dirty White Boy. “It was a really enjoyable experience. By the time it got to the publisher it was already written, so it didn’t feel like a chore. In fact I had 150,00 words, and we had to edit it down. I was on a real high, celebrity endorsements, great reviews, so I had this second book ready, thinking ‘I bet they can’t wait to get this out’. But they said they hadn’t made enough money back on the first one. Of course my confidence fell. It took me back to all the times when I had been doing artistic things before and the door had been slammed in my face. I went from a high to a low and I put the book away.”

By that time, Dirty White Boy had been adapted into a play that had two sell-out runs in the West End. Yet the second book remained locked away. “It was about a year ago that Jorge said, ‘Why don’t you get the book out, it’s easier now, especially with Kindle’.” At the word Kindle we look at each other and exchange winces. We are, after all, in one of the longest running queer bookshops in the world.

“I researched it and decided I wanted it to be done as a book.” And that is when the manuscript that was to become Goodbye to Soho started to undergo a change. “I had all this material waiting. And I wanted to do justice to all the characters in the first book and say goodbye to them properly. The second book was tough. The first one was knocked out, but the second one I really mulled over. A couple friends in the book died and I wanted to honour them.”

It was the one of the friends who died, the unique Sebastian Horsley, author of Dandy in the Underworld, that provided the final piece of the jigsaw puzzle. “I was invited to visit Maggie Hambling at her studio. She was a friend of Sebastian Horsley’s and painted him a lot. I walked into her studio and it was covered in paintings of Sebastian. I was walking around and then I just burst into tears and had to leave the studio. When I came back in she asked if I was all right, and I said, ‘I’m really sorry, but a painting has never had that kind of effect on me before’.” I pull back, expecting that the story will have an emotional punch, as that is what is written on Clayton’s face. Instead, he adds, “She said the definition of a good painting according to Andy Warhol is if you can make a New York suburban housewife burst into tears”. He shrugs to say, “that’s that,” and we both laugh.

“She asked if I was doing another book. I said I had planned to, that it was called Goodbye to Soho, and it was my take on Isherwood’s Goodbye to Berlin. She said, ‘Would you like one of these paintings on the front cover?’.” And there’s that emotional punch, not where you would expect it, but where it has the greatest impact. It’s testament to Clayton’s skill as a storyteller.

“If I had got that book out a couple of years before it would have been rushed, the publisher would have had final say on the cover and what went in it. With this I had complete control. At the time I was depressed but now I’m glad that it did happen that way. I’m absolutely 100% that I like everything in it. It has been a slog but I’m proud of it.”

I am interested in how the book evolved, and how the manuscript that was locked away then became the book Goodbye to Soho. Was it largely complete because the bulk of it had already gone into the blog, as it had done with Dirty White Boy? “I write a lot of diaries and notebooks. There were things I hadn’t blogged about but I had written them down. When important things happen I write them down, like I did when I went to see Quentin Crisp.” The recollection of Clayton’s day with Quentin Crisp, a flashback to 1997 from the cold March of 2008, is one of the high points of Goodbye to Soho.

“I’m so glad that when I got home that night I wrote everything down. I knew I would do something with it. And 15 years later I was able to work that story into the book. There was a lot of looking over old notes and emails, old diary entries that I had to rework.  The first book was more immediate. This I had to research. What did I go through, what were my feelings?”

Clayton’s standing as a Soho guide has even caught the eye of the National Trust. “They contacted me recently because they’re doing an app on Soho. They asked if I’d walk around with them. I think the guy thought he’d have a couple of stories and 3 hours later …” He trails off, as neither of us are surprised that he had more stories than he did time. “When we were finished, he said ‘How can we go and do somewhere like Reading after this?’.” Then Clayton adds, “A lot of it was X rated so it might not make it in there”.

“We were walking down Wardour Street. The man said, ‘You’ve had a story about every street. You can’t possibly have a story about where I’m standing now.’ I said, ‘Funnily enough, see that place, I used to go clubbing there in ‘80s. It was called The Pink Panther. It was an after hours club full of trannies and rent boys and drug dealers. I remember going in with my partner. I was 19 he was 20. This mafia type guy had his eye on me. He was trying to get me off my boyfriend. He pulled a knife out and me, being all protective, yelled “Don’t kill him, don’t kill him”. I told him for years after, “I risked my life for our relationship”.’

“The National Trust guy just said, ‘Oh my god you really do have stories about everywhere’.”

Perhaps, I suggest, that could go into the next book.

“If there is another book I’ll be writing about Soho in some shape or form. The next step could be to go back and talk about lives of the characters before and bring them up to the present. In my own little way it’s amazing that this place has had such an impact on me. I had been failing at creative things for decades, and then without trying all this happens.

“When we left Soho I felt like I’d lost everything. I’d lost the characters, I’d lost my muse, I didn’t have anything interesting to write about. I go to Soho a lot to try and recapture that vibe, and give me ideas on what to do next. Maybe the next book will be Hello Vauxhall! I don’t know.”

Clayton’s skill as a diarist is what makes Dirty White Boy and Goodbye to Soho such engaging and absorbing reads. Has he thought about turning his hand to fiction? “I was offered characters that fiction would not be able to invent,” he laughs. “How can I now possibly start writing fiction?”

The Soho that Clayton chronicles in his books is already disappearing. “It’s sad what’s happening to Soho now, although I know places shouldn’t remain the same forever. The Colony Club is gone, which was an institution, the brothels on Peter Street have been knocked down, Sebastian Horsley has died, the independent shops have been kicked out and the high street shops are moving in. It’s become an extended version of Covent Garden. What made that place special for 500 years is slowly being eroded. It’s a shame. It is a unique area with so much history and you can’t reproduce that in another location.

“I’m quite glad I captured it in that moment before it changed. I hope that in a hundred years time some spotty teenager is doing a thesis on Soho and picks up this book and thinks, ‘that’s what it was like. How camp is that?’.”