The formidable Shakespeare Institute has an enthusiastic, new director who is unconcerned at being labelled a luvvie. Peter Holland talks to Jennifer Wallace

Peter Holland is a luvvie. At least, that is what one of his former Cambridge colleagues has called him. It is the closest to criticising him that anyone will get and even that mock insult does not trouble him at all."I don't mind being called that," Holland says with amusement. "Luvvies say 'oh darling' and that's OK. But I think luvviedom is also a state of enthusiasm and I don't mind being enthusiastic."

He appears to practise both principles of being a luvvie pretty professionally. As I arrive at his new office in the Shakespeare Institute in Stratford, I am greeted not with a "darling" admittedly but certainly with a flamboyant kiss. He is entertaining friends from a Shakespeare centre in America. Terms like "performance space" and "the energy of a production" puncture his conversation. Soon he leads us off excitedly to where Oliver Parker, director of the recent film of Othello, is addressing the institute. If you are enthusiastic enough, it seems, everyone is a friend and every theatre show is "wonderful" or has elements of wonder in it.

There is general consensus that Peter Holland, 46, is just the type of new director that the Shakespeare Institute needs. Academics confess to feeling that the "institute has been in the doldrums for years" and that "they need somebody like Peter to pull it together to get better quality students and generally sharpen and tighten things up". Jonathan Bate, professor of English at Liverpool University, originally the hottest tip for the directorship, confirms that "the institute, rightly or wrongly, has a reputation nationally and internationally for being rather traditionalist and perhaps rather hostile to some of the new critical approaches" and that Holland's openness to all kinds of critical theory will be "very good for the Shakespeare Institute and consequently for Shakespeare studies nationally".

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Holland is aware of the expectations surrounding his new appointment. Since Allardyce Nicoll first established the institute as part of the University of Birmingham in 1951, there have been three other directors - Terence Spencer, Philip Brockbank and Stanley Wells - all leading Shakespeareans whose portraits now peer earnestly from the walls of the Stratford Victorian house. The directorship carries with it a chair at the university and part of the job involves the usual professor's task of guiding postgraduate research. But, as Holland explains, the institute has also become "the visible, public face of Shakespeare", the aegis for the prestigious biennial international Shakespeare conference and "a sort of port-of-call for all manner of inquiries on matters Shakespearean".

The best feature of the Shakespeare Institute, from Peter Holland's point of view, is its links with the Royal Shakespeare Company theatre and the RSC and theatre history archives at the Shakespeare centre in Stratford. "I don't think there is anywhere else that one can get that sort of configuration," he enthuses. It suits him admirably because his research has always been centred on performance. His first book, The Ornament of Action, analysed the way in which Restoration dramatists wrote plays with specific actors in mind. Most recently, he has published a collection of his prolific theatre reviews, under the title English Shakespeares (1997), with a general introductory chapter giving guidance towards interpreting performance. The construction of the set, the performance length, even the timing of the interval, he argues, have crucial effects upon the overall impact of the theatre experience and the consequent interpretation of the play.

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Above all, he is interested in audience reception, in trying "to understand what happens when I go to watch a play". It is an interest with a long history. He was first taken to Stratford by his parents at the age of eight to see A Midsummer Night's Dream, and became hooked. "My parents went to the theatre all the time," he admits. "That's why I can trace back a very long memory of watching it, which I think is crucial for a lot of the work that I'm involved in, being able to compare backwards." When choosing a doctoral research topic with Cambridge professor Anne Barton, the priority was simple: "I wanted to do something that connected with the fact that I have always gone to the theatre." (Holland pronounces "theatre" reverently and theatrically, with the emphasis on the second syllable.) So why not become an actor, or at least a director? Holland is quite candid in admitting that, surprisingly, he has never acted or directed and that he thinks he could not do it, that he has a different sort of imagination. "I think," he adds starry-eyed, "that directors and actors are magical people, who have abilities to metamorphose when they get on stage in ways that I do not understand." His task is not to undergo the metamorphosis but to analyse it. He finds himself closer not to the director in the wings but to the critics in the front row. A frequent reviewer for BBC Kaleidoscope and the TLS, he differs from critics such as Michael Billington only in the extent to which he also speculates about the activity of watching.

In many ways, judging a great performance is like assessing a good translation. Holland explains: "The energy has to be in the interaction between the play and the production. It's not about some banal notion about being true to the text. That isn't necessary." This is one reason why he has become interested in the export of Shakespeare, in non-English language versions of Shakespeare where, as he puts it, the text's potential is "mined" by the translator to produce "quite extraordinary results". He is also fascinated by what happens to the meaning of Shakespeare plays when they are staged in a different cultural context. A recent programme, Shakespeare's Globe, which he made for the BBC World Service, took him to India, Russia and the United States as well as continental Europe in his search for alternative stagings. ("I am paid to do two things I very much like doing - one is going to the theatre and the other is travelling. It is almost indecent and embarrassing.") His travels offer him a new perspective on the line that Shakespeare is a Dead White European Male. "Shakespeare," he says, "can both be the epitome of empire, the vestige of imperialism and colonialism, and it can be a text which is subversively freeing from forms of colonialism. I don't see why it has to be one or the other."

This capacity to see both sides of the argument is characteristic of Holland. Describing himself as "a sort of woolly liberal", he refuses to become a card-carrying member of any one critical theory faction. It means that, unusually in the acrimonious world of academia, he has no enemies. Both sides in the battle between traditionalists and new historicists which is continually waged over Shakespeare respect him. (Traditionalists are interested in studying the text alone and new historicists in the historical context in which the work was produced.) Anne Barton, the fervent opponent of trendy new historicism in general and its leading proponent Stephen Greenblatt in particular, is full of praise for her former protege. "He is one of the best two research students I've ever had," she recalls. "He combines a practical knowledge of the theatre with genuine scholarship and has a quite exceptional flair for the reading of dramatic texts." The Cardiff radical professor Terence Hawkes, a cultural materialist and loosely aligned with Greenblatt's work, is equally enthusiastic: "I think he's an excellent appointment. I've always got on with him and I think he's very sympathetic to all kinds of different approaches, even my apparently absurd approach."

Even Peter Holland's relationship with the institute's previous director, Stanley Wells, seems to be good. Wells, while always interested in the theatre and at one time vice-chairman of the RSC, was really on the traditional wing of Shakespeare studies, described as "solid" by Hawkes. He was renowned for his textual editing and became the general editor of the New Penguin Shakespeare as well as the ground-breaking Oxford Shakespeare Complete Works. With his much admired 1994 edition of A Midsummer Night's Dream, Peter Holland can match Stanley Wells for scholarship and earn his respect. But the smooth takeover at the institute should chiefly be attributed to Holland's typical determination to see merit in everyone and his refusal to engage in petty criticism. When asked whether his directorship will be markedly different from that of Stanley Wells he is emphatic: "It's not different, it's a continuation."

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It all suggests that Holland is a good man for the job, that he will be able to unite people while also nudging the institute in a more modern direction. Already Jonathan Bate feels that the work of the institute is bearing his stamp. The programme for next summer's Shakespeare conference, organised by the institute, includes several plenary lectures by American feminist and post-Marxist critics who would not have been invited in the past. It shows Holland's eclecticism and openness to different areas of critical theory, and, according to Bate, is "a straw in the wind".

So is Peter Holland something of a "chameleon poet", Keats's famous description of the Bard? He certainly looks a little like Shakespeare, his bald pate and trimmed goatee beard recalling the now iconic First Folio picture. And actors and directors say he "watches well" because he has no agenda but simply "allows the production to do its work and then responds later". But for the moment the "public, visible face of Shakespeare" is more interested in modestly attending his next theatre show or working on his next book on Shakespeare and film than in analysing his identity or public persona. He is hoping to seize the chance to watch an entire rehearsal sequence. He also plans, since after years of living in Cambridge the RSC is now, as he puts it, his "local theatre", to see particular productions many times during their run to explore their development. "I'm stage-struck", he admits. "I get a kick out of being with actors. I like talking to actors and directors, and I find it great if they like talking to me."

Jennifer Wallace is director of studies in English, Peterhouse, Cambridge.Her most recent book is Shelley and Greece, Macmillan.