Percival Everett’s new novel lures the reader in with the brilliant simplicity of its central conceit. James is the retelling of Mark Twain’s 1884 classic, Adventures of Huckleberry Finn, from the point of view of Jim, the runaway slave who joins Huck on his journey down the Mississippi river.

While it would be possible to enjoy James without knowing the original, its power derives from its engagement with Twain’s book. For British readers, it also helps to know something about the centrality of Huckleberry Finn in American literature – and African American discomfort with that centrality.

As an American growing up in the UK, I had an early and personal taste of the first. It was a proud day in 1983 when we got our author copies of the new Puffin edition of Huckleberry Finn, with its introduction by my dad, Paul Theroux. I still have mine: a red paperback illustrated by Quentin Blake. It was part of a series of canonical children’s books that included Treasure Island, The Secret Garden and The Railway Children. My dad’s breezy foreword was aimed at young British readers who were unfamiliar with the book – an unimaginable category in the US, where Huckleberry Finn was a staple on the school curriculum. And yet as early as the 1950s there was growing debate about how and whether the book should be taught. There are more than 200 occurrences of the N-slur in the text. How would that go down in America’s newly desegregated classrooms? And could, or should, a white teacher attempt to read aloud Jim’s dialogue, written in dialect? In 1984, in a long critical essay in the pages of the Mark Twain Journal, the African American writer Julius Lester wrote: “I am grateful that among the many indignities inflicted on me in childhood, I escaped Huckleberry Finn.”

The most vexed aspect of the book is the portrayal of Jim, for decades the most prominent black character in the American literary canon. While 14-year-old Huck memorably struggles to reconcile his learned prejudice with his growing love for his enslaved companion, Jim – an adult with a wife and children – has no such arc. Jim in fact becomes progressively more one-dimensional as the book flops towards its clumsy denouement. Loyal, superstitious, childishly simple, Jim’s main purpose in the novel is to give Huck an opportunity to exhibit his moral growth.

Enter Percival Everett, no stranger to debates about the representation of race. His 2001 novel, Erasure, adapted for the screen as the Oscar-winning American Fiction, told the story of a highbrow African American novelist despairing at the reception of his work and winning unexpected acclaim with a bogus account of black urban despair. With James, Everett goes back to Twain’s novel on a rescue mission to restore Jim’s humanity. He reconceives the novel and its world, trying to reconcile the characters and the plot with what now seems obvious to us about the institution of slavery. The result is funny, entertaining and deeply thought-provoking – part critique and part celebration of the original.

It would be a shame to reveal all the myriad ways that Everett subverts and reclaims the original story. But, in essence, its controlling idea is that “Jim” is a performance, a disguise that conceals the real James. First of all, James doesn’t talk the way Twain – or Huck – thinks he does. In private, on paper, and among other black people, James speaks and writes in correct, formal English. The south, as we see it through James’s eyes, is a Truman Show for white people, in which the black cast is careful not to break character. As soon as a white person is within earshot, the black characters slip into dialect and perform a version of blackness that’s designed to make them appear non-threatening. In a comic early scene, James coaches his children on the correct forms of incorrect speech. As he reminds them, “The only ones who suffer when they are made to feel inferior is us.” And whereas the Jim of Huckleberry Finn is ignorant and superstitious in ways that are played for comedy, James is a thoughtful bibliophile who debates in his dreams with Voltaire and John Locke and harbours an ambition to write his own story one day.

As in the original novel, James and Huck take flight together on to the Mississippi: Huck running from his abusive father, James because he’s going to be sold. Many of the same key incidents occur. In Huckleberry Finn, there are various sections when Jim and Huck become separated. Now we learn where James has been in these interludes. One, dripping with layers of irony, involves James, who’s blessed with a decent tenor voice, getting recruited to perform in a touring minstrel show. This is a wink at the fact that Twain, who loved blackface performance, drew on its tropes for Jim’s speeches in dialect and the comic set pieces built around his apparent stupidity.

The demotic poetry of Huck’s first-person narration is one of the things that gives the original book its strong claim on being canonical. Everett doesn’t try to compete with this. Instead, the book’s narrative voice is precise and almost pedantic. Huckleberry Finn is intoxicated with the romance of escape, but the prose style of James reminds us that the reality of being a runaway slave is sober vigilance. We are constantly shown that the stakes for James are life and death. One of the most celebrated sections of Huckleberry Finn involves two characters called the King and the Duke, a pair of shameless con artists who join Huck and Jim on their raft. In Everett’s retelling the episode acquires a much more unsettling edge because the two old frauds possess a power over James that is so complete.

Even the celebrated moral climax of the original novel is transmuted into something bleaker. The culminating moment of Huck’s journey in Huckleberry Finn comes in a passage where he wrestles with the question of whether to denounce Jim to his owner. Huck turns away from the racist morality he’s internalised since childhood and chooses loyalty to Jim, though he believes it means spiritual damnation. “All right then,” he concludes. “I’ll go to hell.” This is the crux of Huckleberry Finn and a key part of its claim to be an anti-racist novel. Everett’s book reminds the reader that Huck’s self-sacrifice remains purely theoretical. Despite its deft humour, comic set pieces and great lightness of touch, James is the story of a man who knows that he’s already living in hell.

• James by Percival Everett is published by Mantle (£20). To support the Guardian and Observer, order your copy at guardianbookshop.com. Delivery charges may apply