The compelling opening scene of her latest book, Black Water, features a man, John Harper, lying in a hut at night in the middle of the Balinese jungle, terrified he is about to be hacked to death.

"I knew nothing about Harper when I wrote that early scene," she says. "I just knew he was lying awake and he was very afraid. He was afraid of something that he himself had done. I had to write 350 pages to find out what it was."

The image that sent the British writer on her odyssey of discovery first suggested itself when she was herself lying awake in the Bali night – although not in fear of her life.

It was in 2012 and she was visiting Indonesia for the Ubud Writers and Readers Festival.

"One of the very odd things for me about going was I was in such a beautiful place and I couldn't sleep a wink," she says. "It was a combination of jet lag after a hideous journey and also one too many cocktails at the parties."

And then there were all those unfamiliar night noises, so different from the car alarms and shouting drunks she is used to hearing from her London home.

"There is nothing like lying awake in the middle of the night to give you an idea for the novel," she says.

That visit to Ubud also prompted in Doughty a fascination with Indonesia, provoked in part by the realisation of how little she knew about the world's fourth-largest country.

"Whenever I go to foreign literary festivals I start reading about the history and try to take an interest. I was shocked at my own ignorance about Indonesia in general," she says.

"I knew absolutely nothing about it and I think that is very common for British people. Indonesia has no place at all in the British imagination because it was never colonised by them; there isn't an Indonesian diaspora here so people aren't even introduced to it culturally."

Black Water is set against the backdrop of the Indonesian genocide of 1965-66, in which a million or more people died in a nationwide spasm of anti-communist violence.

"Very few people know what happened in Indonesia after independence and the rise of the PKI [the Communist Party] and the events of 1965," says Doughty. "It seemed to me it is one of the great untold tragedies of the second half of the 20th century. It ranks alongside the killings in Rwanda and Cambodia but no one in Western Europe has heard of it."

It is Harper's involvement in these events that return to haunt him, providing the book's central theme of moral responsibility and how circumstances can drive people to the most brutal extremes.

Harper is an ambivalent character seemingly of no fixed ethnicity. Born in a Japanese internment camp to a Dutch mother, when he goes home to the Netherlands he is bullied for being "black"; however, in the US he is tormented for being "Japanese" and in Indonesia he is considered a white foreigner.

"It was very important to me that Harper was mixed race – a chameleon who is at home nowhere and everywhere," says Doughty.

Black Water is Doughty's eighth novel and follows the hugely successful Apple Tree Yard, which has gone on to be made into a BBC mini-series starring Emily Watson.

Her work is characterised by changes in tone and direction which, she admits, can make her difficult to market.

"My poor publishers!" she says. "Publishers love nothing more than a writer doing the same thing all the time. I do something different every time.

"With each book there is a sense that I'm trying to do something that I haven't done yet. What really floats my boat is finding a topic I know nothing about.

"I just go all over the place really and just cross my fingers that the readers will come with me."

Louise Doughty will speak at Byron Bay Writers' Festival, August 5-7.

Black Water
Faber and Faber, $29.99