The back of my copy of The Ghost Of Thomas Kempe suggests it is suitable for readers aged nine and over. That easily includes me, although now and again I wonder if I might prefer it if it didn't. Viewed from my increasingly distant standpoint, under nine seems a wonderfully simple thing to be. No bills, no debt, and few thoughts that the future might not go on for ever. Nothing much to worry about at all except long division and the odd spelling test, and in summer, even less of that. A comfortable time, in other words. So I'm glad of a book that can take me back there as skilfully and enjoyably as does this little book Penelope Lively wrote back in 1973.

The Ghost Of Thomas Kempe is a glorious reminder of the fun of being a boy. It centres on James – a fun, clumsy, Just William kind of character who delights in just scruffing around with his almost-talkative dog Timmy. He makes a mess in the kitchen, digs tunnels in the garden and conducts "studies" on interesting insects. It is all delightful, and it all happens under golden sunshine, in a peaceful village, in a lovingly described cottage. Lively evokes bliss for her young hero – and just as brilliantly disrupts it.

James's problems begin when a new message is chalked onto the blackboard his father has put outside their cottage to advertise the sale of apples. It reads: "Sorcerie, Astrologie, Geomancie, Alchemie, Recoverie of Goodes Lost, Physicke."

Soon ornaments are being smashed, doors are being slammed and trouble is kicking off all over the place. Most people assume it's James's fault, not least because a series of notes appear around the village of Ledsham instructing people to go and call on him and demand he make them various potions. James knows better though. Responsibility lies with the ghost of one "Thos. Kempe Esquire. Sorceror" who has re-emerged from the 17th century and is convinced that James is his apprentice.

Our young hero's worries increase when Kempe vandalises the doctor's surgery, writes across the blackboard at James's school and daubs across a fence the information that James's next door neighbour Mrs Verity is a "wytche". Penelope Lively describes it all with infectious glee. The best scene comes when a pompous vicar visits. Doors slam. Chairs are moved out from under him. Tea is made to cascade over his trousers. A barometer is smashed. His head is made to collide with a roof beam. Why? The ghost writes his explanation on clean page of James's personal notebook: "I lyke not Priestes."

You don't have to be nine to find this stuff funny. When I re-read the book for this article, aged 36, I laughed just as much as ever. There is also great comfort in these descriptions of boyhood – even if they also come with their own difficult truths. This may be a book targeted at children, but it's still Penelope Lively. She never talks down to her younger readers, never assumes that they are less than intelligent. The result is a book more profound than most written for grown-ups. And also sadder.

Even in the opening pages, we hear that the village of Ledsham has "the air of being dwarfed by the present". A new, uglier reality is encroaching on the cosy past: "New housing estates were mushrooming now on two sides of it, but the centre remained as it must always have been with the houses and streets a size smaller than the houses and streets of a modern town. Lorries, and even the tops of cars, rode parallel with the upstairs windows of the terraced cottages."

It soon becomes apparent that everything in the book is at odds with time – as James becomes all too aware. His innocence is pricked by piercing revelations:

"Somewhere deep within stout, elderly Mrs Verity, with her rheumaticky hands that swelled up around her wedding ring, and her bad back that bothered her in damp weather, there sheltered the memory of a little girl who had behaved outrageously in Sunday School. And that when you stopped to think about it was a very weird thing indeed."

Thomas Kempe most obviously carries this kernel of a different age and of time working against him. The ghost is funny, but he is also, eventually, tragic. He is out of step, out of place, unable to cope with the changes that the passing years have wrought. And as we reflect on these vagaries, we also come to realise that James's childhood summer isn't all that long in the greater scheme of things. And so, this retreat into childhood brings a freight of melancholy. The past is a place you can never properly revisit. You always remember what you've lost as much as what you once had.

That knowledge adds to the sweetness of Lively's lovely descriptions of messing around in apple trees, meandering by the river, and long empty days under blue skies – but it's bittersweet. Yet even here, there is comfort. The Ghost Of Thomas Kempe also shows that plenty of other people share the pain of mortality - and that one of them is a writer as fine as Penelope Lively.