For those of us who first discovered Baby Dee through her live shows, her debut on Drag City, Safe Inside The Day, came as something of a surprise. The Will Oldham and Matt Sweeney produced album, which featured Dee mostly on piano, backed by guitar, bass and drums, turned out to be my favourite record of 2008. But it was very different to the solo Baby Dee I'd seen marching onstage in tiny clubs, in unlaced workmen's boots and assorted eccentric outfits, throwing back her scarf, shaking out her ginger frizz of hair and sitting down with a self-deprecating cackle before a large ornate harp, and after a brief greeting somewhat in the manner of a garrulous New York cabbie, teasing out heartbreakingly beautiful, baroque-tinged ballads which it seemed I'd known all my life, while at the same time knowing they were like nothing I'd ever heard before.

This is the Baby Dee represented on A Book of Songs for Anne-Marie. A kind of prequel to Safe Inside The Day, it's actually a re-recording of a set Dee first released in 2004 on David Tibet's Durto label, in a limited edition of 150 book/CD packages. Recorded by Dee at the piano in one take, and hurriedly mailed off without even a listen through, that version possessed its own magic, to be sure. But compared to the fully-realised arrangements presented here, courtesy of producer Maxim Moston, it's a demo. In most cases Dee returns the songs to the harp, the instrument they were originally composed for, and the sound is subtly filled out and counter-balanced with a modest chamber orchestra of strings, horns and woodwind. And let's face it, chances are you're hearing these songs for the first time anyway; in fact, dear reader, chances are you don't actually know Baby Dee from Bobby Davro, and a bit of background would probably be more useful than any further comparisons.

Born in Cleveland in 1953, Dee's story is one of constant transformation: from Ohio hippy kid to New York portrait painter, amateur musician to Conservatory school dropout, to musical director of one of the city's biggest Catholic churches and then, following a sex-change operation, to highly successful street performer, fake hermaphrodite in a Coney Island freakshow, and a return to New York's gay clubs and performance art scene where a friendship with Antony Hegarty led to Dee arranging strings and playing harp on the first Antony and the Johnsons album. Then the next phase; returning to Cleveland to start writing serious, heartfelt songs for the first time, while simultaneously giving up any notion of making money from music and becoming a tree surgeon instead; then accidentally dropping a tree on someone's house and suddenly having to fall back on music as a career once again, and discovering that the tapes of her songs she'd been sending to Antony had been passed on to Current 93's David Tibet, who liked them enough to release them as they were on his own label, giving Dee enough exposure to start playing live across America and Europe, and gaining her fans including The Dresden Dolls and Marc Almond, both of whom engaged Dee as a support act in recent years.

Which brings us pretty much to A Book of Songs for Anne-Marie; an album about the transformative and redemptive power of Love, and about loving, and being loved, as the highest condition that humanity can aspire to, and the sacred right of every human being. When, in an interview reproduced on her website, Dee was asked who Anne-Marie is, she answered, "Who do you love? Who have you lost? Who ought you to have loved but didn't? Who loved you best? Let that be Anne-Marie." These are songs that deal in ideals, elevating frail human relationships to the level of myth; in them we can glimpse our own potential, to touch for a moment the sublime.

"Though my love is far away, I shall sing and wake the day," Dee intones haltingly on 'Love's Small Song,' accompanying herself on the harp before violin, mandolin and French horn gradually break through like rays of light from the rising sun. The title track, originally the second half of the same song, sets out Dee's intentions, and her fondest hope: to make a book of songs, to close her arms upon a world of good and, as her voice rises and deepens with feeling and resolution, "to find a grateful place, that warm and sunlit wall."

'Lilacs' explores Dee's full range, her voice soaring and swooping tremulously one moment and descending to a half-spoken intimacy the next, her native accent showing through. Baby Dee's singing, her whole style, is perhaps an acquired taste: technically imperfect, she nevertheless works in a serious classical manner that never slouches or mumbles, and for this reason the average Kasabian fan may snigger into their sleeve on accidental exposure to it. Dee's reference points, after all, are wholly outside of rock and pop: at a push you might imagine Peggy Lee's very strange 1956 album Sea Shells, with the vocal commitment of a Peter Hammill or latterday Scott Walker, but that's as far as it goes. Otherwise you have to look back to medieval plainsong, Thirteenth Century hymnals, traditional Celtic ballads and their descendents in French Chanson and German Lieder. There's also an unflinching innocence at work, where a belief in the ideal of love and the power of fairy tales goes hand in hand with an absolute acceptance of death and mortality, and an awareness of the darkest depths of the human soul. But in Dee's aesthetic, love, beauty and the human spirit always triumph over the senseless banality of evil; they have to, because unless you come through the other side, then revelling in nihilism and brutality for its own sake is, at best, a childish self-indulgence, and at worst you become complicit in the very horrors you're reflecting. So when Dee sings that "lilacs bloom the whole year round, for friends remembered, lovers found," it's no twee greetings-card platitude, but the song of an adopted New Yorker who saw that city's gay community and art world devastated by AIDs in the thirty years she lived, loved and worked among them, and yet who still believes in renewal, rebirth and survival.

"Love is stronger than death, more jealous than the tomb," Dee concludes on 'Set Me As A Seal,' which closed the original album; here though, it's followed by 'As Morning Holds A Star,' which promises "no more sad songs, no more night skies," and 'Morning Fire,' in which Dee describes herself as "a house where dawn comes cold," who has nevertheless found warmth and light. These suggest that Dee has finally, in her own life, found the great love that she's been singing of. One hopes so: on the evidence of this album, never has a heart been more filled with the potential to love fully, and to fully appreciate being loved in return.