The Egyptian novelist Naguib Mahfouz, who has died aged 94, was the Arab world's most prominent literary figure. Neglected in the west, modern Arabic literature achieved international recognition when Mahfouz was awarded the Nobel Prize in 1988, and it is difficult to think of any winner of the prize whose status as a writer was so dramatically changed as that of Mahfouz by the award.

From being a writer known only in the Arab world and to a handful of Orientalists, he sprang to world attention. Whereas previously no major publisher in England or America was prepared to publish his work, overnight he was taken up by a leading American publishing house and became a bestseller. His novels were then quickly translated into many languages.

Born in Gamaliya in the old city of Cairo, the son of a minor official, the writer spent his first years in the distinctive medieval atmosphere with its narrow lanes, clustered overhanging buildings and picturesque artisans. Its features became part of his consciousness and are brought to life in some of his early realistic novels and, more particularly, in The Cairo Trilogy on which, both in the Arab world and in the west, his fame in great part rests.

Mahfouz's life was ordered and singularly devoid of variety or dramatic happenings - if one is to exclude the 1994 assassination attempt by a young extremist from which the writer miraculously escaped with his life. He received a traditional education at a kuttab (Koranic school), then at primary and secondary schools, where he read many of the great works of classical Arabic literature and mastered the Arabic language with its complicated grammar and syntax. Having graduated in philosophy from Cairo University in 1934 he then began an MA in philosophy, which he abandoned when he decided to make a career of writing.

Realising that writing must inevitably be part-time, he joined the civil service until his retirement in 1971. Among the posts he held were director of the film censorship office and, finally, adviser to the culture minister. On into the 1980s, Mahfouz supplemented his income by writing film scenarios, yet while more than 30 films were made from his novels, he refused to adapt his own work for the screen.

On his retirement he joined the group of distinguished writers, among whom was the playwright Tawfik al-Hakim, at Egypt's leading newspaper al-Ahram. From then on his novels were first serialised in the pages of the newspaper before being brought out in book form. Having perforce to earn his living as a civil servant, Mahfouz acquired the necessary discipline to organise his time so that he would be able both to read widely and to produce a considerable corpus of fictional writing. Even feeling that marriage might prove a hindrance, he delayed marrying until the age of 43.

He wrote more than 30 novels. His first attempts were three novels with Pharaonic backgrounds, the first being The Curse of Ra (1939). Next came a period of social realism as seen in novels like Midaq Alley (1947), an entertainingly vivid depiction of the alleyways of his youth and the extraordinary characters that inhabit them: the hashish-smoking cafe-owner Kirsha, and Zaita, the "fashioner of deformities", who performs maiming operations on those wishing to take up a life of begging.

Then, in 1956, Palace Walk, the first volume of The Cairo Trilogy, came out, to be followed a year later by the other two volumes, Palace of Desire and Sugar Street. A novel on the grand scale of some 1,500 pages, the trilogy deals with three generations of the Abd al-Jawad family and extends from 1917 to just before the end of the second world war.

During this time Egypt was engaged in a struggle for independence from British rule. The three volumes describe in minute detail the daily events in a middle-class Egyptian family, recording for history as no other book does, a way of life that has disappeared under the impact of western influence and the pressures of modern life. The political happenings of the times are interwoven into the lives of the many characters. Members of the protagonist family represent the main trends in the political life of the country: the Wafd party, with its heroes Saad Zaghloul and Mustafa Nahhas (the party with which Mahfouz associated himself), the burgeoning socialist movement as exemplified by the writings of Salama Mousa, and the beginnings of a fundamental Islamic movement.

The myriad characters and events are handled with great skill and the writer is seen throughout to be in complete control of his material. It was a remarkable achievement, in particular when one bears in mind that the Arabic novel had only recently come into being. The Trilogy quickly became a bestseller in the Arab world, and those who could not read it came to know its characters through the films that were made of it; that it could also be appreciated outside its own cultural confines is shown by the fact that in the United States the Trilogy achieved sales of more than 250,000 copies.

Though not published until 1956-57, the Trilogy was completed before the 1952 revolution of Gamal Abdul Nasser. Mahfouz was disillusioned by the revolution and the repressive era that it introduced. Unable to criticise it, he preferred to remain silent. Then in 1957 he started work on Children of Our Alley (which was translated into English as Children of Gebelawi). It was the novel that brought its author into conflict with Egypt's religious authorities. After its serialisation in al-Ahram, al-Azhar, Cairo's religious university, refused to allow the work to appear in book form. In a society with religious susceptibilities, exception was taken to a novel dealing with issues that were considered not acceptable subjects for fiction. Later the novel came out in Beirut and until today is available in Egypt only under the counter. Many years later it became the reason for the attack on his life on October 14, 1994, in which he was hospitalised with a wound to the neck, leaving him partially paralysed in his right arm.

The novel shows a departure in his approach, being written in an episodic form, a form that he was to adopt later in other works. While the themes that preoccupy him often repeat themselves, Mahfouz continued throughout his career to seek new techniques. Children of Our Alley is an allegory in which God appears in the character of Gebelawi, Adam as "Adham", while other characters represent the prophets Jesus and Muhammad. Though a new translation was published by the American publisher Doubleday in 1996, a decision was taken not to make it available in Egypt.

Other novels which are of particular interest include The Harafish (1977): it too is written in episodic form and takes place in an alleyway of Cairo's old city. It deals with several generations of the same family, universalising the alleyway into an image of the human condition. The myth here is of his own invention, unlike his use of the fall of Adam in Children of Our Alley.

Mahfouz was widely read in western fiction and particularly admired Flaubert, Stendhal, and Proust, and Melville's Moby Dick. His borrowings from the west in matters of technique can be seen in his novel Miramar (1967), published in 1967, in which - following Lawrence Durrell's Alexandria Quartet - he relates the story of several characters staying in a pension in the seaside city of Alexandria, recounting the same incidents from the point of view of four different characters. The book was published in English in 1978 with a perceptive introduction by John Fowles who, at this relatively early date, saw in Mahfouz "a significant novelist".

Published in 1979 and then in English in 1995, Arabian Nights and Days is yet another novel to be written in the episodic form which Mahfouz came to favour. In it he chooses tales from the classic Thousand and One Nights and reforges them into narratives dealing with those themes that have always occupied him: good and evil, man's social responsibility, and, increasingly with time, death. The novel is set in an Arabian Nights atmosphere, but many of the issues relate to Egypt's present problems: the corruption of those in power, social justice and the rise of the fundamentalist movement.

Hardly had Miramar appeared when the Israeli victory in the 1967 six-days war, a defeat that was as humiliating as it was unexpected, rocked the Arab world. Mahfouz's reaction was to give up writing novels for five years.

During this period Mahfouz added to the total of 14 volumes of short stories that he published, often with stories of singular blackness that matched his mood. His contribution to the Arabic short story is often forgotten in the face of his overwhelming achievement in the novel. Among his collected works in English is a single volume of stories under the title The Time and the Place (1992). One of the stories represented in this volume, Zaabalawi, has found itself included in the Norton Masterpieces of the World as the only piece of Arabic writing, apart from some extracts from the Koran. His very first at writing fiction were short stories, which he was delighted to find being accepted and appearing in print. He recounts how one day an editor asked him to pass by the office. He did so and was handed a pound for his latest story. "One gets paid as well!" exclaimed the budding writer in disbelief.

His last novel was Qushtumar (1988) and his last published work was another collection of short stories, The Seventh Heaven (2005) which dealt with the afterlife. He wanted, he observed, to believe that something good would happen to him after his death.

Mahfouz also rendered Arabic literature a great service by developing, over the years, a form of language in which many of the archaisms and cliches that had become fashionable were discarded, a language that could serve as an adequate instrument for the writing of fiction in these times.

Neither the fame nor the considerable monetary reward afforded by the Nobel Prize altered his life. He continued to live in his modest flat in the middle-class district of Agouza with his wife and two daughters and changed nothing in his daily routine. He remained until the day of his death, by then a frail old man with failing sight and hearing, a modest man with a ready smile and that sense of humour for which Egyptians are famous.

أ‚آ· Naguib Mahfouz, writer, born December 11 1911; died August 30 2006