Stepping off a bright summer street, through a heavy wooden door, it is as though someone has switched out the lights. The painter Alison Watt and I are plunged into darkness.

There is the faintest trace of incense and the background tinkling of a piano tuner at work. This is Old St Paul's, in Edinburgh, a city-centre church famous for its dramatic history, for its excellent organ, and shortly to become known for Still, a unique artwork that Watt has installed in its memorial chapel.

Since January, Watt has been perched atop some shiny red scaffolding in the brightly-lit Leith church hall that serves as her studio. She has been painting seven days a week and is

exhausted. ''It's the most physical thing I've ever done,'' she says.

''It has taken absolutely everything out of me.''

Looking at Still, it is not surprising. The work consists of four individual canvases, each at 6ft-square considerably bigger than the artist herself, conjoined to produce one vast painting. It is a bleached out, ghostly image of white fabric folded and suspended like classical drapery. The sequence of paintings is suspended from the high ceiling, rather than conventionally hung, and lit only by the light that falls through an adjacent window, so at its core is a dark empty shadow where the canvases meet, forming the shape of the cross.

Where Watt's recent paintings of fabric have resembled crumpled bedclothes bearing the recent imprint of the human body, or the intimate folds and tucks of the female form, Still resembles a garment that has been emptied of its human wearer. Absence and loss are the unmistakable implications of an artwork that hangs

next to the long roll call of war dead, and a cross that once

stood next to the Grassmarket gallows and was kissed by many

a Jacobite martyr.

''I wanted to reflect my feeling about this space,'' she explains. ''And it is a feeling of overwhelming sadness.'' She also wanted to pay tribute to the beauty of the building, which she chose after a year scouring Edinburgh's places of worship. The former bishop, Richard Holloway, told her that when he plied his trade there, he found its atmosphere addictive. ''He said he was like an alcoholic having his first drink.''

In recent years, Watt, who trained at Glasgow School of Art and shot to prominence at an early age by winning a national portrait prize and subsequently portraying the Queen Mother for London's National Portrait Gallery, without trademark hat, has been producing art that is more pared down, intimate and obsessive than ever.

She lives in Edinburgh, with her husband, the writer Ruaridh Nicol, and her new exhibition will open in the city at the Ingleby Gallery on August 5. She is now 38; ''Every year that goes past I make less and less work. Now I might only make three paintings a year.''

She left the London commercial gallery she had worked with since the age of 20 in 1997 and her decision to work on a more

private and painstaking scale paid off with Shift, her exhibition at the Scottish National Gallery of Modern Art in 2000.

Now she is meeting the questions that present themselves to many artists at mid-career: questioning her achievements, finding herself harder to satisfy,

''I suppose it's analogous to getting older,'' she says. ''When I start a project I think I'm going to feel better about what I'm doing, but there is never a pay-off. You expect to feel a conclusion, instead you're starting on the next thing.''

That next thing, which will be funded by her recent Creative Scotland Award, is the creation of a flawless walk-in cube, with an entirely painted interior. It is part of her increasing interest in how to present paintings in space and how to give the viewer the same sense of being overwhelmed and absorbed in paint, that she feels herself while working in the studio. ''I want to make a painting that you can literally walk into.''

At Old St Paul's that feeling of absorption, comes not just from the work's impressive scale, but from the associated rites and rituals of the church, which remind Watt of her Catholic childhood. ''Since I installed the work it has been used every day. If mass has just finished you'll come in and there will be a solitary candle. People have told me it has changed the way they feel about the space.'' Planned, as temporary installation, Still already feels as old as the tradition that surrounds it. Perhaps, it might find a permanent home in the dark, scented, Edinburgh interior.

Alison Watt: Still is at Old St Paul's Church, Jeffrey Street Edinburgh from Aug 1.

Sponsored by the Dinard Fund and Adam and Co. Her exhibition at the Ingleby Gallery runs from Aug 5 to Sept 11.