Several years ago, on a damp, dour Sunday, I was tired, disillusioned and uninspired, wandering a glum Aberdeen after a long shift as a junior doctor. The fingers of serendipity, however, gently pointed towards the art gallery door, where an exhibition of the work of Angus McPhee was on display. I had never heard of him. A crofter's son, he had died, aged 81, in 1997, and had been virtually mute for 50 years as an in-patient at a psychiatric hospital in Inverness.

There were boots - fragile, woven in grass; a vest - perfectly netted together with commas of sheep wool, caught on fences, taken and spun by Angus between his fingers. And sandals - a cushion of beech leaves embellished with a strap of twisted grass. There were hats - wide- brimmed sunhats and others in the Davy Crockett style; there were leads and harnesses for ponies, socks, waders and jumpers. All at once they seemed simple, complex, pointless, glorious.

McPhee's work was discovered by Joyce Laing, an art therapist who has been searching for what she calls "artists extraordinary" for the last 35 years."It means someone who is in touch with their subconscious," she says. "And although you don't have to have a mental illness to be an artist extraordinary, it is vanishingly rare outside of it."

Without formal training and cultural conditioning, and outside easy categorisation, the French artist Jean Dubuffet is credited with first seeking "art brut", as he called it, as he searched for uninhibited raw expression in art. While Laing classes William Blake and Gaudi as artists extraordinary, she stresses that mental illness does not necessarily give anyone a particular gift in art: "It is rare, as rare as artists are in the general public." In her 35-year search, she has found around 20 extraordinary, or "outsider" - a term she dislikes - artists.

Laing glows as she recalls her discovery of McPhee. A trained art therapist, she had been given a tiny grant to research these artists. She took a taxi from the railway station to Craig Dunain hospital in Inverness. The driver turned out to be a former nurse, and when Joyce asked him if he had ever seen any memorable art by a patient, he slammed on the brakes. "Yes," he replied. "There was a man who made things out of grass." But he could not remember which part of the hospital he was in.

Craig Dunain is a huge, sprawling hospital, and when she found McPhee, Laing could scarcely believe the trove he showed her, hidden under holly bushes in the bottom of the garden. When she asked for permission to take some items and put them on display in a gallery, McPhee - to her surprise - signed his name in copper plate. Despite having been able to speak before he became unwell, he had been mute since being admitted to hospital.

Angus was born on Uist in the Outer Hebrides, and signed up to the Lovat Scouts, a Highland regiment, at the onset of the second world war. He was sent to the Faroe Islands for military service but became ill. He initially seemed to recover but relapsed shortly afterwards. He was taken to Craig Dunain, where he remained for half a century.

While long stays such as this in psychiatric units would be highly unusual today, then it was commonplace, and there was little choice of effective medication. However, McPhee would not have been idle. He was assigned to the "farm ward", and worked on the land. With grasses, leaves and wool at his fingertips, he began to create.

Dr David Tait, consultant psychotherapist at Murray Royal Hospital in Perth, has seen at first hand the effect of art therapy on recovery and wellbeing. "Art therapy reaches the parts that other psychotherapies can't reach. Imagery can bring into consciousness previously unacknowledged or inaccessible feelings and thoughts."

While most art therapy will not be outsider, or extraordinary art, it may well be a source of it. "Art takes away the feeling that just because you're a patient you can't do anything," says Tait. "Once you have started to create something, there are great benefits to self-esteem, and limits to what you can achieve break down."

Within Murray Royal, Tait and his art therapist colleague set up an open studio, and called it The Art Factory as a tribute to Andy Warhol. They organised an exhibition of patients' work at the Royal College of Psychiatrists' annual conference last year.

However supportive and encouraging psychiatrists are of art therapy, though, there are conflicts. Says Laing: "Some artists do complain about being on medication: why try to make me 'normal'? These are big questions for psychiatry."

Tait agrees that there are difficulties: "There is no such thing as a side-effect-free drug. Any medication has costs and benefits. While some individuals may feel blunted by their medication, for others it is a liberation from the private, personal hell of ill-health, and in turn creativity can re-emerge."

While art therapy may be useful for many people with mental illness, Laing does not believe that art therapy has much to offer an outsider artist. "You see artists at college sketching, then looking at their work, discussing it. Artists extraordinary never look at what they are doing. I'm one of the few people who have had access to work with extraordinary artists. When they finish it, they just get up and walk away, and if you say are you going to finish it?, they say, I am on to something else. They know when to stop."

While no artist whose work Laing has dealt with has objected to their art being displayed, none, in her experience, has ever come to see their own exhibition.

Meanwhile, the public receive the art differently. When McPhee's work is shown, Laing says that people stay longer compared with other contemporary art spaces, ask more questions, and comment more in visitor's books. In Dublin, the Irish Museum of Modern Art holds the Musgrave Kinley Outsider Art Collection on permanent loan, which contains more than 600 works. Internationally, one of Art Newspaper's most visited shows last year was an exhibition of the work of John the Painter - a pseudonym that preserves the anonymity of the Irish artist, who has been ill for many years.

Confidentiality is a sensitive area. Both Tait and Laing stress the need to get clear permission to display works of art, which in many cases are signed by the artist, and Tait has run workshops on this topic. In addition, the artist must be fully capable of giving consent. Laing speaks of her reticence in taking works from McPhee, even with his permission, although he had burned most of his work along with the autumn leaves each winter. "I regret not having rescued more," she says.

Despite the popularity of the work, Laing has been unable to obtain funding for a permanent exhibition space. While it will be shown as part of the Pittenweem arts festival - in the tiny Fife coastal village next week - it will be viewed only by appointment after that. So why should we care? "Art is about our humanity, and producing art lets us all, including our patients, share in this" says Tait. There should be a place to exhibit all genres, and it seems bizarre that there is no permanent outsider art collection in the UK."

I agree. It is difficult to say what Angus McPhee's work showed me, but I am richer for having seen it.

· Angus McPhee's work can be seen August 7-15 at the Old Manse, High Street, Pittenweem; www.pittenweemartsfestival.co.uk. Exhibitions of Outsider Art can be seen in the Mexico Gallery, 6 Fleet Road, London NW3 020-7485 6577. Irish Museum of Modern Art www.modernart.ie. A retrospective of outsider artist Nek Chand will be shown in November at the Institute of Indian Art and Culture, 4a Castletown Road, London W14 9HE. Information: 020-7381 3086.