Grayson Perry, carpet bomber, and his bear

Few would dare walk on the Turner Prize winner's new rug

Grayson Perry is no stranger to difficult themes. His Turner Prizewinning portfolio included images of sexual abuse and fetishism. Now he is tackling the "war on terror" - with his teddy bear.

Perry, 46, famous for his pottery decorated with ornate gold leaf and intricate, but often disturbing, scenes, is turning his hand to tapestry for his latest work. Osama bin Laden, the 7/7 Tube bombings and the abuses of Abu Ghraib all feature.

The artist, who is as well-known for his cross-dressing as for his art, has taken as his inspiration rugs created by Afghan craftsmen. Thanks to that country's troubled recent history, modern rugs now include the machinery of modern warfare instead of traditional designs.

"The war on terror is everywhere, all the time and like everyone else I have feelings about it. But it's all muddled up - I've taken no line on it. But it's all there: the wall around Palestine, Washington, oil derricks, dead bodies - lots of them - video cameras, Abu Ghraib, Humvees, jets, stealth bombers." At its centre is Perry's childhood toy, a bear called Alan Measles, which stands, King Kong-like, on the twin towers of the World Trade Center.

"I'm making a whole series of works where Alan Measles gets muddled up with other people's beliefs," said Perry.

"In one he's a Buddhist, in another he's the baby Jesus. I'm quite interested in how myth gets bound up in other things.

"I'm trying to get Alan to become a god. I've always thought there are a lot of similarities between gods and cuddly toys - we tend to project all of our good feelings on to them."

The bear featured in Perry's childhood war games when he would stay in his bedroom and stage lengthy battles between his toys. His latest work, to be featured in a TV profile for The South Bank Show next Sunday, was commissioned by an upmarket rug company and due to be finished early next year. It will be turned into a limited edition of 15 copies.

"I would have liked it to be a rug rather than a tapestry," said Perry. "But these things will be so expensive that no one would realistically want to put them on the floor."