A tender comedy about child abuse? What is Todd Solondz up to?

A sloppy, heavy-breathing phone-sex fetishist with Coke-bottle glasses. A grossly overweight young tenant who calmly dismembers then refrigerates her building superintendent. A horny Manhattan cab driver from Russia who serenades a shy New Jersey misfit with You Light Up My Life. These are just some of the socially maladroit, sexually frustrated loners who populate Todd Solondz's film, Happiness.

But these characters pale into insignificance compared to a far greater furore surrounding the film in the director's native America. For not only has the 39-year-old director dared to broach the highly sensitive subject of paedophilia, he treats it with an explosive mixture of tenderness and comedy. "Paedophilia is the most taboo subject," says Solondz. "I didn't push it for the sake of pushing it - but I didn't restrain myself."

Happiness focuses on a fractured family from New Jersey called the Jordans. The elderly parents, played by Louise Lasser and Ben Gazzara, have retired to Florida but have decided to separate. There are three sisters: mousy Joy (Jane Adams) who everyone assumes is desperate for a date; Helen (Lara Flynn Boyle), a coolly elegant writer who is a frigid S&M fan; and smiling, perky Trish (Cynthia Stevenson), an upper-middle-class housewife. Trish is the only sibling who, on the surface, has the ideal set-up: a big home, two children, and a successful, caring psychiatrist husband, Bill (Dylan Baker).

Then Trish's bubble bursts. After acknowledging his attraction to pre-pubescent boys, Bill drugs his 10-year-old son's schoolmates during overnight stays and sodomises them in their sleep. Bill occupies the point at which the institution of family and individual desire collide: "I imagined that the Jordans were Jewish and Trish had married a Gentile," says Solondz. "That was the prism through which I was looking at these characters."

Solondz, himself Jewish, says he was inspired in part by Russia's "Citizen X", who murdered more than 50 children, and the passing in the US of Megan's Law, which requires law enforcement officials to notify residents when a convicted paedophile moves into the neighbourhood. The eventual confrontation between remorseful father and rejected son is bravely poignant: "Dad, would you have fucked me?" "No, I would just have jerked off."

"Bill succumbed to his demons," says Solondz, "but he wouldn't transgress with his son. Father and son are so intimate and so honest and, in some perverse way, very funny, but not in a yuck-yuck way."

You're bound to ask if this reflects in any way his own childhood experience? "I had a good relationship with my dad," he answers, "but, ironically, I think I'd be better adjusted if I'd had that kind of open relationship with him. But trying to imagine that with my father is just too..." He trails off.

That, however, was too much for Universal Pictures, parent company of the American art-house distributor October Films, which provided the production budget of nearly $3 million and planned to release the movie in the US after its world premiere at Cannes, where the film won the international critics prize. Executives at Universal, which acquired October two years before, only saw the film after its Cannes outing and immediately forced October to cancel its distribution plan on moral grounds. Eventually, Good Machine, the company that produced it, bought the movie back from October and released it themselves without a rating.

Happiness took $3.2 million in the States, just recovering its costs. According to Good Machine's Ted Hope, "We hoped Happiness would surpass $5 million, but I think we were hurt by it being written about as an anti-suburban film."

Solondz has no illusions about Universal's decision. "It was just about money. I don't think it was as insidious as 'We have a moral plan of what Americans should or shouldn't see.' Quite the contrary. They are trying to get as large an audience as possible. Happiness is just a little movie. There was a lot of controversy and flak that they weren't anticipating.

"It didn't make it worth their while to attach their name to it. If they thought it would make $100 million, then of course the movie would have been "morally courageous". Why go through all of the headaches with the stockholders?

What surprises him, however, is that "people took a studio seriously when they said they found the film 'morally objectionable'. The idea of attaching any morality to a studio is naive," he says. He complains that, contrary to the negative buzz that Happiness generated, daytime talk shows are able to address subjects like paedophilia: "They offer entertainment under the guise of a serious discussion."

Two years before Happiness, Solondz introduced us to 13-year-old New Jersey suburbanite Dawn Weiner, the hideous heroine of Welcome To The Dollhouse, 1996 Grand Jury Prize winner at Sundance and the Guardian's 1997 video of the year. It was a marvellous if disturbing debut feature. Charmless Dawn, replete with thick glasses and shiny retainer, also suffered in the sexual craving department - her crush on a groovy older student was unrequited, but the cross she bore was more about not fitting in than not being serviced.

Solondz doesn't seem to mind placing himself in an equally unflattering light. Having tried writing and performing his own comedy sketches in LA after graduating in film from New York University (he went home when "people told me: you're not funny"), he played the lead in his own short film, How I Became A Leading Artistic Figure In New York City's East Village Cultural Landscape in 1986. In the opening sequence, he looks in the mirror, while his voiceover proclaims: "It struck me like lightning - oh my God, I'm a nerd!" His character, whose glasses are even larger than Solondz's real-life ones, abandons a tacky New Jersey township for Manhattan's bohemian East Village, where he recreates himself as a model in a tight leather suit with multi-coloured spiked hair. Newly confident, he struts down punkish Avenue A, only to be rebuffed by an increasingly voluminous chorus of sidewalk slackers shouting "Nerd! Nerd! Nerd!"

The road taken in How I Became... parallels Solondz's own career path: a New Jersey upbringing, moving to the East Village, entering the competitive downtown art scene - and an unattractive appearance. If this sounds a mite unkind, it's only because the film-maker plays on the way he looks. He makes no effort to do anything with his thin wisp of hair, he wears enormous tortoiseshell glasses, and his idea of an ensemble is the blue checked shirt and brown houndstooth pants he wore to our first meeting.

So is the extremely slow, whiney voice the real Solondz or a doppelgänger he has perfected and polished? Certainly, the audience laughed at everything he said, even the serious bits, when he appeared on The Letterman Show last year. Solondz, a heterosexual congenital sciatica sufferer, describes Livingstone New Jersey, where he grew up, as "a flat, middle-class development which I thought was the ugliest place on the planet." His builder father and housewife mother raised their four children in a kosher home. "I have yet to eat a BLT," he says. "It's a visceral thing. It's hard for me to go to greasy spoons, in case I get of whiff of that."

"I certainly didn't grow up with any sense of community in the suburbs: It was my family, then all of the others. In America, you have a sister in Milwaukee and a brother in Los Angeles." As Solondz sees it, this kind of fractured family set-up is the reason our most essential desires go unsated. "We are the country that suffers isolation and alienation more than any other," he explains. "Because of technology and the media, we have the illusion of intimacy and contact. Much of this is because of our fractured families. Other places, you have a sense of family and community. We talk about family values because the family isn't there. We want to hold on to some relic."

• Happiness opens on April 16.