Gerard Woodward’s two most recent novels, Nourishment and Vanishing, were both exuberant, loose‑limbed second world war narratives involving lugubrious characters and outrageous turns of events. Nothing, it seemed, could be too outre; be it cannibalism, self-immolation or a hapless scheme to steal a parcel of turf from Buckingham Palace’s lawn.

The Paper Lovers returns to the present day and imposes an entirely new form of restraint, being set in an unnamed southern English city that seems “ordinary in every way except for the fact that it happened to have one of the world’s finest gothic cathedrals in the middle of it”. That might equally serve as a description of the book itself, which goes out of its way to appear almost unremarkably suburban and domestic, yet has a huge and unavoidable spiritual crisis tearing through its centre.

In a key scene the protagonist, Arnold Proctor, pays a visit to the cathedral. As a middle-aged university lecturer, minor poet and committed atheist, his appreciation of the building is purely aesthetic. Today, however, he has come here to pray. Attempting to summon up some scraps of belief, Arnold reflects that the ancient stones have become “a solid expression of the agony of time … Something of that pain was now in his own body. The idea came into his mind that his own flesh and the flesh of the cathedral were entwined in some way.”

So what can have brought an intellectual sceptic such as Arnold to his knees? A simple transgression of the seventh commandment would appear to be the answer – following two decades of untroubled marriage to Polly, who runs a shop in the cathedral close selling hand-crafted paper, Arnold has fallen madly in lust with Vera, a mainstay of his wife’s sewing circle who also happens to be a practising Christian.

The story yields all the expected verities of middle-class infidelity: furtive afternoon assignations scheduled between lecturing and childcare commitments; slightly disappointing trips to nearby seaside resorts; the perpetual fear of discovery. What sets the novel apart is the particularity of Woodward’s observation and the stealthy insinuation that Arnold’s embrace of a lover might be leading him towards a wholly unexpected love of God.

Vera’s spirituality initially strikes Arnold as a disincentive, yet she seems to possess the luminous penumbra of a Renaissance martyr floating on a cloud of pheromones. When she first attends a needlework session in Arnold’s living room he is particularly attracted by her scent: “The gorgeousness of her smell seemed to give her a halo, to make her shine, radiate. Indeed the scene before him was like a religious image, a depiction of an epiphany, the Adoration of the Sewing Maidens.” It is only later that he realises why this vision should have had such a profound effect: “It wasn’t the feminisation of the living room that had so disconcerted him, but its desecularisation. She had raised a little chapel in the heart of his own home.”

Woodward’s way with metaphor reminds you that he, like Arnold, is a poet academic who cannot help noticing tea bags “puffed up with air like the anoraks of drowned trainspotters”, or “a miniature Manhattan of condiments” lined up in a greasy spoon. And the narrative takes a surprising turn when a troubled young poet calling himself Martin Guerre launches a one-man protest outside Polly Proctor’s stationery shop. The fact that he is dressed in a paper suit attracts little notice in a cathedral city inundated by twee street entertainers. But Martin (or Ryan, as he turns out to be called) bears a grudge, having been spurned by the small press that Arnold and Polly run as a sideline, producing limited edition pamphlets on artisan-crafted paper.

Rather disconcertingly, Martin/Ryan’s poems describe a tortured allegory in which a boy made out of paper suffers unrequited longing for a figure closely resembling Polly herself. This introduces a discordant element to an outwardly conventional novel, but it is at least in keeping with the baroque turn of imagination that characterised Woodward’s earlier books. The writing is at its most lyrical in the passages reserved for Polly’s fascination with paper-making:

When she lowered a frame into the pulp it sank into an impenetrable morass of broken-down matter, and when she lifted it out a perfect rectangle of paper held within the frame, dripping. It had to be treated as carefully and as respectfully as new-born life. If she thought about its origins, from the unstitching of the carbon-dioxide molecule to the felling of an elderly tree, it seemed a miracle more wonderful than anything dreamt up by religion.

As a confirmed nonbeliever, Polly is ultimately more appalled by her husband’s faith than his infidelity. Woodward has crafted a subtle allegory of obsession and redemption in which the mysteries of paper-making closely resemble the Christian sacrament itself.

• The Paper Lovers by Gerard Woodward (Picador, £16.99). To order a copy for £14.44, go to guardianbookshop.com or call 0330 333 6846. Free UK p&p over £10, online orders only. Phone orders min. p&p of £1.99.