Guy Pearce: No more Mr. Nice Guy

He conquered Hollywood, then almost threw it all away. Now Guy Pearce is in a better place – and this time, he's staying put

It's a hot Saturday lunchtime. The terrace of the Hotel Excelsior in Venice is buzzing with wealthy patrons, while bikini-clad residents lounge around the nearby pool. Standing to one side is Guy Pearce. Once upon a time, as Ramsay Street's buff diving champion Mike, you might have caught Pearce jack-knifing into the water. But Neighbours was a lifetime ago. He was just 19 when he started his three-year stint, back in the Aussie soap's heyday. Now he's 44, with a beard flecked with grey.

He comes over to greet me, carrying a glass of water. He's wearing jeans, a black-check shirt, wicker-style flip-flops and sunglasses. He may not quite boast the torso of old – across his Neighbours time, he trained as an amateur k bodybuilder, even winning the title of Mr Victoria – but he still looks lean, in trim. His brown hair, swept back, is receding a little now. Still, he looks better than he did in the Razorlight video for "Before I Fall to Pieces", in which he played a dishevelled superhero, sitting on a couch, munching pizza with manky teeth.

Never one to hog the limelight, it's nevertheless been a remarkably fertile time for Pearce. He's appeared in the last two films that claimed Oscars for Best Picture – Kathryn Bigelow's The Hurt Locker, in which he played a bomb disposal expert, and The King's Speech, in which he featured as King Edward VIII. "I did say I only do Academy Award-winning films from now on," he jokes. "But how funny is that? I reckon it's about five minutes on screen, between those two movies." In truth, he can barely remember his three days in Jordan on The Hurt Locker.

Yet Pearce is the sort of actor who comes without the encumbrance of a 24-carat ego. Quite happy to drop in on screen for a cameo – as he did for John Hillcoat's The Road, playing a bedraggled hobo – when he does take a lead, he's almost too modest to accept the applause. "All the best performances I've done" – he cites Chris Nolan's ingenious backwards-thriller Memento, in which he memorably played a memory-addled widower – "I haven't had to do one iota of work. I haven't had to work at creating something. As much as I try to accept the credit for good work, I certainly don't feel like it was my doing."

Maybe this is why directors love him. "Guy has an incredibly intense presence," says Hillcoat, who initially cast him in The Proposition, his 2005 Western scripted by Nick Cave. The musician concurs: "He's so tightly wound. You can see that in the good films that he's made. He's got a sort of clenched jaw and it's all happening in his face." All three have reunited for what promises to be one of the most anticipated films of 2012 – bootlegger tale The Wettest County in the World, which also stars Tom Hardy, Gary Oldman and Shia LaBeouf. "I come in with the smallest role," he says. Size really doesn't matter to him.

He plays support again in his new movie Justice, a vigilante potboiler starring Nicolas Cage and Mad Men's January Jones, who play husband and wife. After she's assaulted, Cage's character, a mild-mannered teacher, is approached by the mysterious Simon (Pearce), the leader of a group that takes the law into its own hands. His proposition is simple: does he want revenge on the man who attacked his wife? "Simon is someone who probably started out with a grudge against a judicial system he felt was failing, but begins to manipulate the situation to suit himself," says Pearce. "I think people are generally malleable, and for some it's harder to find the clarity between right and wrong."

With his head shaven, Pearce is quite menacing, proving he can elevate even the most mundane material. Still, it rather pales next to his work in Mildred Pierce, Todd Haynes' sublime HBO-produced five-part mini-series, which is released on DVD next week (after its Sky Atlantic run earlier this year). Based on the James M Cain novel of the same name, which inspired a 1945 movie version, it's arguably one of the best dramas to come out of America this year. Co-starring with Kate Winslet, and working with the director of Far From Heaven, it was, as they say, a no-brainer for Pearce. "People say, 'What made you want to do Mildred Pierce?' Simple – Todd Haynes, Kate Winslet and HBO. How do you say no?"

Set in 1930s Los Angeles, the film follows Mildred (Winslet), a resourceful mother-of-two who rises from waitress to successful restaurateur. When she meets wealthy playboy Monty Beragon (Pearce), they fall in love but, with the interference of Mildred's spiteful elder daughter Veda (Evan Rachel Wood), happiness soon evaporates. It's markedly different to the 1945 movie, which starred Joan Crawford. In that, Monty's character is murdered, the filmmakers turning the story into a flashback-driven film noir.

"Todd had always said he really wanted to honour the book," says Pearce. "Things like character subtleties, which were lost in the earlier film, are really evident in our version and in the book, where you see these changes through somebody like Monty, who is obviously spending his life trying to enjoy every moment he possibly can. And he can – obviously through the wealthy upbringing he's had. But when responsibility is required, we really see what's been repressed come to the surface."

Not long after we met, Pearce was awarded an Emmy for his work on Mildred Pierce, beating off competition from Paul Giamatti, James Woods and Tom Wilkinson. The first major award of his career, his acceptance speech was gloriously un-American. "It really was a delightful experience making Mildred Pierce," he said. "I got to have sex with Kate Winslet many, many times. And I didn't realise it was going to result in this. So Kate, I share this with you, because you're an extraordinary woman. Thank you for allowing me to insert myself in your world of Mildred!"

Pearce was born in Ely, Cambridgeshire, and it comes as no surprise to learn that Pearce's bawdy humour has British roots. Not that his early memories are tinged with happiness. His father was an RAF test pilot, working on the Nomad aircraft programme among other projects, until a plane crash cut his life short. Pearce was eight at the time. He just remembers coming home and finding all his relatives there. His mother told him what happened, then broke down in tears. "I'd never seen her like that before – it just added to the shock. To be honest, I can't remember much about how I felt at the time – maybe I've blocked it out."

Pearce moved with his mother and elder sister Tracy to Australia shortly afterwards, heading to Geelong, near Melbourne. "We lived a really hidden existence, and I've just maintained that ever since. It was never a loud household. I was never overly social. I was pretty much on my own a lot of the time. I lived in my own little fantasy world." The person he was closest to at the time was Tracy, who has Down's syndrome. "The relationship that she and I had, because of the special person she is, was on a totally different level to what I had with anyone else."

Acting came along when he was 10, initially on stage in productions of Alice in Wonderland and The Wizard of Oz. By the time he left high school, he had an agent and his Neighbours role lined up. "I think my last exam was on a Friday and I started Neighbours on a Tuesday or something. I had to move to Melbourne in that weekend and suddenly become a professional person." On the soap at its height, Pearce saw first-hand what it meant to be famous. "Our faces were so fresh in people's minds. It was all about screaming teenagers. It wasn't hard to deal with but it was definitely a monstrous aspect of my life."

If anything, it taught Pearce what he didn't want from his career. Rather than ply his trade as a hunk-for-hire, he snapped his Neighbours image in two, playing a drag queen in The Adventures of Priscilla, Queen of the Desert, the cult comedy that has since inspired a hit stage show. Brought to the attention of Hollywood, Curtis Hanson then cast Pearce as the self-righteous sergeant in his classy 1997 adaptation of James Ellroy's LA Confidential. Arriving at the same time as Russell Crowe, with whom he co-starred, Pearce was rather eclipsed by his fellow Antipodean.

He had other things on his mind that year, such as marrying his partner, Kate Mestitz, who he'd known since childhood. They've remained together ever since, despite Pearce's peripatetic lifestyle. "We've got pretty good at dealing with being apart from each other," he admits. "But we're in constant contact – texting each other all day every day." With Mestitz handling her own busy career as a psychologist, she and Pearce made the decision not to have children. "I believe you need to have a level of emotional consistency when you raise a child and I don't know that I have that. It would be unfair to inflict that on a child."

Still based in Melbourne, Pearce's life seems far removed to the fripperies of Hollywood. But he's not immune from failures and frustrations – such as Gillian Armstrong's 2007 film Death Defying Acts, in which he played escapologist Harry Houdini. "It's a fantastic film that got released in one cinema, and they didn't tell anybody." It was his co-star Catherine Zeta-Jones who rang him and told him. "It was one of the most devastating things. I won't go into why and who, but that was extremely disappointing."

Sensitive and soulful, Pearce takes everything to heart. "You just do all this work, and sometimes you work on k things and they're terrible and they end up getting massive publicity and everyone goes on about them and you think, 'Argh! Christ! Why is this the one that everyone's going on about?'" Like The Time Machine, maybe? The 2002 HG Wells adaptation, with Peace in the lead, was critically lambasted but still took $123m around the world. Pearce shoots me a sly smile. "I'll let you decide. I've learnt not to be too vocal about the things I'm disappointed in."

It came at the end of a bad period for Pearce, whose agents were desperate to turn him into a leading man. "I hated the way Hollywood worked for the first 10 years [I was there]," he admits. "I couldn't stand it. I just found it so dominating and horrible." Even outside it, the film business was brutal. He cites 1999's Ravenous, a thriller that saw its original director Milcho Manchevski kicked off the production. "I loved Milcho. I was just devastated when they took him away. I was ready to kill somebody. I was going through a very angry period in my life at that stage, so I probably could've killed somebody. It was really horrible. Horrible. Horrible."

So what was he angry about? "I was just angry about a lot of stuff," he sighs. Not wanting to live in LA. Not wanting a career like Tom Cruise. He had a "mini-nervous breakdown", as he calls it. "As I got to the end of 2001, and I realised I hated pretty much everybody that I came across, it wasn't so much a moment, I knew I was getting to a point where I was going to have to do something about this. I just had so much hate in me and I just couldn't stand being around anybody. And so I took myself off and I went to the north-western part of Australia for a month, into the desert, and really just had a good look at myself."

It's hard to imagine the placid Pearce bottling up all this anger. His solution was to "read about 1,000 books", most of them Buddhist studies. "It really just enabled me to kind of see life from a new perspective that essentially then gave me a few tools in how to handle life." He says it didn't all get resolved in the desert. Rather, "that was the action that just got the ball rolling as far as getting things sorted out". So what did bring him peace? "A lot of therapy. A wonderful wife. And not taking so many drugs. Just having a good look at myself, and sorting myself out. And that stuff still bubbles away, and you're still tested by it at times."

He learnt to meditate, concentrating on his breathing. "That was about as much as I could do. It's not that I still really do it. Occasionally I will, if I want to stabilise myself a bit." Overall, he realised he had to change his attitude – certainly when it came to Hollywood. "A lot of it was my own insecurity about my ability. So once I started to feel a bit more confident about that... and once it was very clear that I wasn't going to live in LA, and that I could stay living in Australia, then a few things added up."

Of course, the immovable system that is Hollywood has remained the same – and Pearce knows it. "I don't feel like anything has changed with how Hollywood works. But I'm just much better at deflecting all of that rubbish, and doing what I want to do. And actually being able to laugh about it and feel OK about it. Whereas back then I was, 'Argh!'"

With this in mind, it's no surprise he's stepped up his work rate. Aside from his Nick Cave/John Hillcoat reunion, next year he will be seen in Lockout, a Luc Besson-scripted sci-fi tale. Then comes the big one – Ridley Scott's Prometheus, a prequel of sorts to Scott's classic sci-fi horror Alien. Pearce visibly stiffens when I mention it. "Yeah, I'm not allowed to talk about it," he says, immediately. He's contract-bound not to breathe a word about the plot. "It's incredible, as you can imagine, but if you sign on, you're sworn to secrecy."

There are other projects too – an improvised film with British star Felicity Jones and, if it ever gets off the ground, an adaptation of William Burroughs' novel Queer. Still, he can't help feeling guilty. "All you ever hear about is that actors are just always out of work, which is something that I'm very aware of all the time. And there are these wonderful actors out there who don't get as much work as I do." Maybe one day he'll realise he's got there on merit.

'Justice' is in cinemas nationwide now. 'Mildred Pierce' is released on DVD and Blu-ray on 28 November from HBO Home Entertainment