April 18 (Bloomberg) -- Paula Rego's studio has been invaded.

Interview by Martin Gayford

Strange figures have appeared: Some are gigantically tall, some have bulbous heads like potatoes, others are skeletally thin. First they appeared in her paintings and drawings, now they are going to attend her new show at Marlborough Chelsea, New York.

"It's like bringing my friends here,'' Rego says in a phone interview. "But they have to sit still.''

Of course, these personages aren't really alive. They are grotesque figures made by Rego and her regular human model of many years, Lila Nunes, which Rego then depicts as characters in her work. That might sound a bit cute, all the more so since in the past she has used children's books such as ``Peter Pan'' as sources. Yet when you listen to Rego talk about them, you realize that there's nothing twee about her art at all (nor is there anything twee about those classic British children's stories).

Rego calls one of the modeled figures the "Old Woman.'' This withered, almost naked mannequin, as Rego describes it, has "a mask that looks like Aunty Death or something, but she's quite plump, so she's more like a person with a very skinny body than a skeleton. And she's incontinent, wearing something like nappies.''

So the sinister doll, rather than a game, is a way of confronting grim reality. "It's a way of giving a face to what you become. You become a grotesque as you age -- don't you think? It's difficult to depict that, unless you have the most colossal compassion, so you have to find ways round it.''

Truth and Fantasy

The combination of harsh truth and fantasy is typical both of Hispanic art and the London world of Bacon, Freud and Hirst. Rego, born 73 years ago in Lisbon, belongs to both. She was brought up in Portugal, studied art in Britain, married an English painter -- the late Victor Willing -- and has divided her life between the two countries.

"I'm really both, exactly, British and Portuguese. I wouldn't have done these pictures if I'd stayed in Portugal, not on your life. England gave me the freedom to be more myself, I suppose. Portugal was more restrictive.''

One artist of the past whose name comes to mind when looking at Rego's work is Francisco Goya, painter of sinister carnival masks, grotesque monsters, hideous cruelty, sexuality and old age. Rego loves Goya's work, both the fantasy of his early tapestry cartoons and the bleak horror of his scenes of war and carnage. She is eager to travel to Madrid to see the recently opened exhibition at the Prado, ``Goya in Times of War.''

"I was brought up on Goya,'' she says. "I've always looked at the etchings he did, the `Disasters of War' and the `Caprichos.' I love the bull fights as well. Everything is very simply put down, but he drew the most extraordinary, moving, heartbreakingly wonderful figures.''

Bedroom Goya

"One of the "Disasters'' is of a woman holding a dying man,'' Rego says. "He has been wounded and he's dying; she's holding him up in such a way that his face is near hers, and his mouth is slightly open. So, it's as if he's dying but they could also be kissing. Love and death are going on at the same time there and I find it immensely moving. I've got it in my bedroom; I've had it since 1957. It never stops amazing me.''

Her own work, too continues to evolve. An earlier variety of sculpted model, made by her son-in-law, Ron Mueck, already has changed art history. Mueck evolved his skills as a commercial model maker for special effects in movies and advertising. But he also made one of Pinocchio for Rego, which happened to be seen by Charles Saatchi on a visit to her studio.

"Charles said, `What's that?' and wanted to buy it straight away,'' Rego says. "Before that Ron had made models for films and advertisements but Charles said Ron was a young British artist, and he has just carried on being one since then.''

Her own models are different. "Ron never made anything that was distorted in any way, he has the gift of life.''

Her models are not works of art themselves -- sculptures -- but subjects to be made into art. With their help, her work has moved into a new phase, simultaneously earthy and fantastic, playful and grim, very Iberian and extremely British.

Paula Rego's exhibition, "Human Cargo'' is at Marlborough Chelsea, New York, from April 17 through May 17. For more information, go to http://www.marlboroughgallery.com.

(Martin Gayford is a critic for Bloomberg News. The opinions expressed are his own.)