Cate Blanchett is taking another bite of the royal cherry and returning to the part of England's Virgin Queen in Elizabeth: The Golden Age. The Australian actress also takes on the role of Bob Dylan in I'm Not There and an action hero in the new Indiana Jones movie. She tells Michael Dwyerhow versatility is her middle name.

Coming towards the end of two long days of interviews, Cate Blanchett manages to look positively radiant. We pick up where we left off.

When we last met, she had just played the title role of the murdered Dublin journalist in Veronica Guerin. Blanchett's porcelain features are creased with a smile when she learns that the film was the biggest box-office hit of 2003 at Irish cinemas, (although it failed to make an impact internationally).

"That is fantastic news," she says. "Nobody told me that. Ireland was the one place I was really nervous about because that particular series of events, and Veronica Guerin as a figure, were so well known in Ireland. It is a pity that it did not do well in other countries. Maybe it had something to do with the timing. I don't understand the science of releasing films, if there is a science to it."

Blanchett's latest role is another real-life character, Elizabeth I, whom she first played nine years ago in Elizabeth, collecting the first of her three Oscar nominations.

"I've reprised roles in the theatre, whish is somehow more accepted," she says. "One can go further and deeper into a role such as Hedda Gabler, which is so complicated that you can feel you haven't even scratched the surface the first time around, and you relish the opportunity to do it again. But when you do that in films, it seems that you have to battle to uncross people's arms and to justify what you are doing. Elizabeth I is an infinitely fascinating character, and once we began to discuss the second film, I became drawn into it. And I enjoyed playing a character older than I am. Elizabeth was in her 20s in the first film and she is 52 in this."

In Elizabeth: The Golden Age, the many references to holy war, martyrdom, religious intolerance and fundamentalism inevitably take on a present-day topicality.

"I was very conscious of that," Blanchett says. "The film makes the point that these are issues that have always plagued us. Don't let us think that the western world is just being attacked now. Holy war is holy war no matter what name you ascribe to the religion.

"What I think is really inspiring about the reign of Elizabeth I, both in a humanistic sense and in a diplomatic sense, is that she was comparatively tolerant of various religions. I think she did that because she was a very astute and reasoned thinker and politician."

I note that the cloud of 9/11 hangs over art in so many forms today, explicitly so in Blanchett's recent movie Babel. "It's a cloud and it's an excuse," she believes. "I think it's an excuse for a lot of legislation and for a refusal to think in a reasoned manner. It's given birth to this very instinctual, irrational and emotional form of rhetoric in politics, which strikes me as incredibly backward thinking. There's very little reason or logic in a lot of decisions that are made, and such disregard for facts. How did Osama bin Laden become Saddam Hussein virtually overnight?"

"In that context, I think Elizabeth I was an inspirational leader, given her continual declaration that she did not want to go to war. That's why I find it quite strange from a marketing perspective that the posters for the film describe her as 'Woman. Warrior. Queen.' when she was a queen who absolutely abhorred war and said so repeatedly."

The Golden Age is touted as the second in Shekhar Kapur's proposed trilogy on the life of Elizabeth I, but Blanchett says that she is unaware of any plans for a third film. "Shekhar is a man with a thousand ideas, and I think he throws them out there to see if anyone will catch them. We're only just releasing this one, and I don't think too far ahead in terms of films. It's different in terms of planning things theatrically because I know that development process so much more."

Blanchett will be back on our screens next month in I'm Not There, Todd Haynes's impressionistic film on Bob Dylan. In one of the most daring casting decisions in cinema history, she is one of the six actors Haynes chose to play versions of Dylan in the movie, and she responds ingeniously to the challenge.

"I was absolutely flabbergasted when Todd asked me to do it," she says. "Of course, I knew his body of work, so I knew he wasn't kidding. I thought the idea was fascinating. It's a very astute piece of casting to have a woman in that particular incarnation or version of Dylan. Todd wanted that silhouette because it is so iconic. If he had a man playing it, he probably wouldn't have got that same strange androgynous quality, and people would have interpreted the performance in a much more literal way.

"When I played Katharine Hepburn (in The Aviator), because I'm a woman and because I was representing her in the same medium in which she is known, people interpreted that performance quite literally. I escaped that in Todd's film because it is stylised and it has this Brechtian distancing quality about it.

"I asked Todd if I was playing Dylan or not playing him, and how much he wanted me to get into his skin. He said I was not playing Dylan, but then when I was having costume fittings, I found I was wearing replicas of the exact same suit that Dylan wore on tour at the time. And the hair was quite similar." Then she recalled reading that section of the script, where it read, "Rock star goes electric and wreaks havoc on his tour in the style of Fellini's 8½".

The film is "as much a riff on a creative life as it is about the man himself," she says. "I discovered Dylan when I was at drama school, around the time the world became a very complicated place. It's interesting that so many people who didn't live through Dylan's early musical career are discovering him for the first time now. I think it's because people are searching for some sense of searing poetry and ideology and freedom. We think we're so free, but we're intellectually and spiritually bound. And Dylan is the ultimate escape artist. He is more important than the Beatles, finally."

Blanchett was named best actress at the recent Venice Film Festival for her portrayal of Dylan, and the movie's flamboyant US distributor Harvey Weinstein has declared he will shoot himself if she does not get an Oscar nomination for it.

"Did he say that?" she laughs. "Poor old Harv. I think there's a compliment in there somewhere. When I won the award at Venice, I was absolutely bowled over by it. It's risky to take on a role like that. I did it because it was Todd and because the project was so unusual and films like that so rarely get made."

Her wardrobe for The Golden Age included such vast costumes that she says she could not fit through doorways in some of them. For I'm Not There, she decided to wear a sock inside her trousers. "Yes, I packed my lunch," she chortles. "My husband wasn't put off. He got used to it. He thought it was hilarious to see me dressed as Dylan, although he didn't particularly want to kiss me with stubble over my face."

Next year she will join her husband, Andrew Upton, as co-artistic director of Sydney Theatre Company, where she plans to direct Joan Didion's The Year of Magical Thinking and David Harrower's controversial Blackbird, along with acting in several productions, including Shakespeare's War of the Roses cycle.

"That's where we both got our first jobs after drama school," Blanchett says. "I got my first job as an actor and Andrew's first big break as a writer was there, so we've long been emotionally connected to the company. The offer arose and it was utterly galvanising. It's a huge company with enormous scope and a breadth of work."

She recently reunited with her Babel co-star Brad Pitt for David Fincher's The Curious Case of Benjamin Button, based on an F Scott Fitzgerald short story.

"It's about a man who ages in reverse," she says. "It's a star-crossed lovers' story in which our characters meet in an old people's home when we are very young and there's a moment when their lives intersect."

And she recently finished working on Steven Spielberg's Indiana Jones and the Kingdom of the Crystal Skull. What does she play? "I can't tell you," she says. "I'm sworn to secrecy. Since they made the last one, the internet has just grown exponentially. It's virtually impossible to keep anything a secret any more. I don't know about you, but I don't like knowing too much about films before I see them. That's one of the great things about seeing films at festivals, because they are so new and fresh."

However, can we assume that she is now adding "action hero" to her curriculum vitae? "I hope so," she beams. "There's a lot of action, as you would expect. I was exercising muscles that I had not exercised before. Spielberg kept saying that he felt it was his duty to butch me up."