In Soho, the creative heart of London, an intriguing meeting of minds is taking place. In a distressed-looking former gunsmiths on Beak Street, the artist and illustrator Julie Verhoeven and the musician Graham Coxon are putting the finishing touches to their first collaboration, entitled Ver-boten, Ver-Saatchi, Ver-heaven.

Verhoeven, 37, changed the direction of fashion magazines with serpentine, romantic illustrations that recalled Egon Schiele, Aubrey Beardsley and Jean Cocteau. Among many other things, she has designed bags for Louis Vuitton, a line of clothing for the Italian manufacturers Gibo, and album sleeves for Primal Scream.

Coxon, also 37, is the musician who after ten years in Blur embarked on a solo career that to date has produced six albums, the most recent of which, Love Travels at Illegal Speeds, won critical praise this spring.

Two leading figures at the cutting edge. So why do they look so petrified? Coxon is shrouded behind heavy rimmed specs that he describes as his “chuck-ons” (he says he needs particular confidence to wear the wire-framed variety), and Verhoeven appears to be hiding behind some eccentric dressage, which is finished off with a mermaid that you can play like a recorder and a miniature medal of the Mona Lisa. With Coxon racked by the compulsion to fidget, Verhoeven begins her sales pitch for the new work by describing one piece as a pathetic sort of attempt at a sort of stage set. “Mush,” she later calls it. With promotion like this, it’s a good thing the quality of the work speaks for itself.

The new show feels like Verhoeven’s reflection on the years she has spent in the fashion business, because it takes the theme of dressing up and self-creation and transforms it into a lively theatrical fantasy. She has taken a variety of old folding screens, adorned them with fine needlepoint drawings and created a series of sculptures that hang from their sides — over-sized hand-mirrors, fans, papier-mâché bras.

They are “upset-dressing tables”, she says, “Victoriana gone wrong”. As if they have been lying about for decades and started to be reclaimed by nature, they are beginning to sprout plants from their surfaces.

Coxon is aiming for a similarly organic feel in his accompanying music. “I want to do something that in some way fits with the environment,” he says, “which somehow exaggerates the space, magnifies aspects of it. So it will be a meandering sound piece with mini-events throughout. It will be a blanket of sounds, like a scattering of dust. It will have old-fashioned sounds, and I’d like to copy sounds made by people in the gallery.”

After the strictures of fashion, Verhoeven is revelling in resdiscovering the freedom of the art world. “It’s sheer indulgence,” she says. Coxon agrees. “There are no boundaries,” he explains. “I don’t have to work within less than three minutes so that it will go on the radio. It doesn’t have to be catchy or have a chorus." The ideas behind the music also represent something of a return to his roots for Coxon. He trained in fine art at Goldsmiths in the early 1990s alongside such people as Damien Hirst and Sam Taylor-Wood, although his speciality, he says, was paintings of German soldiers (he grew up on an army camp in West Germany) and wooden sculptures of tools and ploughs, and “machines with sails”. “When I arrived, people seemed far too pompous. They were bloody clever — they were already doing great things before they had even left school — so I soon went from being a pretty serious art student to being one that was scared to death.”

Fearlessness has come for both people, it seems, with experience, but what has undoubtedly made their partnership work above all is their shared love of the 1960s. Many said that Blur re-invented English pop psychedelia and Coxon still says says he doesn’t like to leave the house unless he looks as if he could be walking into that lost decade. Verhoeven’s illustration, meanwhile, has often looked like a reinvention of 1960s styles, a newer, more frankly erotic psychedelic design.

This really is a meeting of minds, and for the short time that such strange collaborations come into being, it feels as though something has been captured, a moment is being bottled, in an extraordinary way. Needless to say, when I ask Verhoeven and Coxon about getting together to create a new mood, to redescribe an earlier time, they are lost for words. They just do it. They don’t have to think about it.

Ver-boten, Ver-Saatchi, Ver-heaven, Riflemaker, Beak Street, London W1 (www.riflemaker.org 020-7439 0000), Mon-Nov 18