“I’m like a fat, balding, alcoholic Tony Bennett, without the voice,” he deadpans. “I’m dreading the whole f***ing thing. A different town every night for a month and a half? It’s terrifying, but it’s the only way I can make money.” He pauses, mid-rant. “Am I ­selling it?” It’s working for me, I tell him.

Eitzel has never had the stomach for empty platitudes. Self-sabotage is more his game, but what he lacks in smooth industry sales talk he makes up for in critical kudos. Over the past 25 years, with and without his band American Music Club, he has created a body of intensely beautiful music that’s been lauded to the skies. Rolling Stone once voted him their Songwriter of the Year, while he has maintained an occasional recording partnership with REM’s Peter Buck, just one of his many high-profile fans.

The gushing reviews have always significantly outweighed sales, but it still comes as some surprise to learn that his new solo album, Klamath, is such a small-scale, home-spun affair. “I’m doing the printing and the manufacturing myself,” he says. “I’ve got my friend’s daughter mailing them out. I’m only ­making 500 copies because it’s all I can afford right now, and I need to sell those to break even. I’m just broke. That’s the truth of

the situation.”

It wasn’t always this way. American Music Club formed in San Francisco in the 1980s and went on to release a decade’s worth of troubled, troubling, oddly affirming and highly influential albums. For a spell in the early 1990s they were signed to ­Virgin and given, if not quite The Big Push, at least a vaguely energetic shove towards the spotlight. Their 1994 album San Francisco was a half-hearted attempt to surf the post-Nirvana grunge wave, but their music

was always too cussed, too desperate, too naked to connect with the masses.

Does Eitzel ever regret the way it turned out? “Of course!” he hoots. “Of course I have regrets, and I could point to a few reasons why it didn’t happen. ­Principally, there was always somebody – including myself – who, after a very triumphant show, would be in the background saying, ‘That was f***ed.’ Or if we ever made a record that everyone liked, someone in the band would be deeply, deeply, irrevocably depressed about it. We never had that thing you need in a band, about being more ambitious than emotional.”

But then emotion is Eitzel’s hard currency. The owner of a deep, gloriously careworn voice, his songs – pitched somewhere between folk and alternative rock – are ripped straight from his life, told with lacerating honesty and black humour. An army child, he experienced a peripatetic childhood, bouncing between California, Taiwan, Japan, Hampshire and Ohio, and his music has the tell-tale ache of rootlessness, something unresolved at its heart.

He is an extraordinary performer. The first time I saw American Music Club play, at a club in Bristol in 1992, Eitzel drank a pint of whisky during the show, bellowed at the soundman for some mysterious transgression and finished by slapping a slice of processed ham on his head. Polished it was not. The last time I saw him, at the Venue in Edinburgh, he revealed that, although he was “basically gay”, after a few drinks he found women very attractive. “It’s confusing for ­everyone,” he sighed, before playing a spellbinding solo acoustic version of Joy Division’s Heart and Soul. On other occasions, I’ve seen him burst into tears halfway through a song.

I wonder what’s going through his head onstage. “I try not to look at the faces,” he says. “I love people who are onstage and generous, and I try to be that person for the audience, but my problem over all the years was that I was always distracted by the lights, the crowd and people looking at me.” On the current tour, piano player Marc Capelle provides the sole musical accompaniment. ­Eitzel says performing without a guitar has made him less self-aware: “Now I can just sing and close my eyes, and it makes me focus on the moment. It really works. We don’t have bad shows.”

At 50, he’s busier than ever. American Music Club split after the false promise of San ­Francisco but reformed in 2003 to make two further albums, and are planning a third. Though the dynamic of the band still seems fraught, Eitzel is excited. “We’re planning on co-writing all the songs, because they don’t like it that I get the publishing because I write them all,” he laughs. “It’s a respect thing, apparently. So it’s going to be a long process. But they’re all great songwriters. I love the band, I really do.”

He’s also writing another record with Peter Buck – “I have to channel my inner pop because he’s a genius of pop songwriting” – and, intriguingly, has completed a piece of musical theatre with British playwright Simon Stephens called Marine Parade. “It’s about making decisions and it’s about love,” he says. “The songs don’t move the plot forward, they work like normal songs do – they come in and mean everything. It works, it’s great, that’s all I can tell you. It’s a populist masterpiece.”

Having lived his songs of drink, drugs, confused sexual identity and emotional despair, Eitzel seems less mired in doom than he has appeared in the past. The last American Music Club record, The Golden Age, was notably lighter than its predecessors, expressing a marked shift in his attitude to his life and work. “I feel sometimes at my most tortured – it’s a default setting and it’s a little phoney,” he says. “I have a broad range of things I could say, so I decided about four years ago that I was no longer going to be a negative person and I wasn’t going to ­surround myself with negative people. It’s a battle. I’m incredibly self-destructive – well, no, there are more self-destructive people, Lord knows – but I don’t want to be that person, or to be ­perceived as that person, any more. I’ve changed a lot.”

Klamath certainly lets a little light in. It’s a simple, beautiful record, named after the place of its conception and creation, the Klamath national forest in California. It’s a work of quiet contemplation, imbued with love and muted regret. “I love the record – stupidly,” he says. “I’d just done about six months of touring, and instead of getting jet lag in San Francisco I drove up country and got jet lag there with these incredibly generous people. There are two hippy shacks on this land and they make their own power with water. It’s just stunning – way, way off the grid.”

Beautiful, remote and largely unknown. No wonder Eitzel felt at home there.

Klamath is out now on Decor. Mark Eitzel plays Cabaret Voltaire, Edinburgh, November 7.