Dereham is the Heart of Norfolk. I know this, because it tells you so on the signs as you enter the town. Until about twenty years ago, Dereham was East Dereham, just a little market town in the Breckland, but it has undegone a massive expansion and redefined itself with lavish amounts of civic pride, and why not? In terms of population, Dereham is now the sixth largest place in Norfolk, but the first five - Norwich, Yarmouth, Lynn, Thetford and Gorleston - are all urban sprawls, and so Dereham is quite justified in thinking of itself as the largest small town in the county, remote and important and almost as close to the exact centre of Norfolk as it is possible to be.

Pevsner was critical of Dereham's expansion in the 1970s and 1980s, considering that the interior of almost every town centre building had been altered to the bad as a result. But the narrow roads themselves survive, and there are some fine frontages. And, above all, the town centre streets are a perfect foil for this magnificent church. Almost without exception, the great urban churches of East Anglia are found outside the biggest towns and cities. In terms of parish churches, Norwich, Ipswich and Cambridge have nothing to compare with the glories of Wymondham, Bury St Edmunds, Kings Lynn, Wisbech or Southwold. Or here, at Dereham, for St Nicholas is one of the great English medieval churches, and not as well known as it would be if it was in a different county.

At first sight, it appears that there are two churches close together. This is because, on the first approach, you are presented with the massive detached bell tower first. Beyond it, the church itself also has a tower, a central tower at the crossing of a huge cruciform church. The two towers are similar in that they both lack elaboration at the top - there are no battlements or pinnacles. This gives them both a fortress-like feeling.

The bell tower dates from the early years of the sixteenth century. The tower must be fully 150 years earlier - and possibly earlier than that, for although it presents itself with Decorated features it may be a rebuilding of a Norman tower, perhaps after the original fell. This would explain why the crossing appears to have been moved slightly to the west at some point - perhaps an earlier tower had fallen and damaged the arcades.

That the central tower now appears as stark as the bell tower may be a result of a reconstruction of the very top after the bell tower was started. But this starkness does not extend to the rest of the building, because the exterior of the church is delicious with details, and is perhaps at its best on the gorgeous early 16th century porch, replete with carvings and niches, demi-angels and an Annunciation, easily as good as anything in Suffolk.

As with any big church, you step inside to a feeling of space - but St Nicholas is more complex than that. Because of the division of the transepts into chapels and the narrowness of the chancel arch, it feels as if you are walking through a series of rooms, new vistas opening up to you as you change direction. This means that the building is not as easily graspable as, say, Wymondham Abbey or Kings Lynn St Nicholas, where the churches are similarly big, but are open like halls. Tom and I spent forty minutes or so here, but I still feel that I don't really have a proper understanding of the building, and I must go back.

It is a truism to say that most Norfolk small town churches are extremist - either militantly Anglo-Catholic or thorough-going Evangelical. St Nicholas is in the first of these two camps, and on this Wednesday in Holy Week we arrived to find a service in progress, the only evidence of the Holy Week liturgy we would see in an Anglican church all day. However, the church is so big and so divided up that it is quite acceptable for visitors to wander around while there is a service on without disturbing it, which is just as it should be, I think.

The star of the show at Dereham is undoubtedly the seven sacrament font. It is Norfolk's best in my opinion, and second in England only to the one at Westhall in Suffolk. Its date and cost are documented; it was installed in 1468 as a result of a bequest for £12 14s. 9d. It appears small and elegant, an illusion from the vastness of the space around perhaps, and is in excellent condition. The stem has eight Saints on it, including St Bartholomew and St Dorothy.

The panels show, working anti-clockwise from the east, Mass, the Priest facing dramtically over a small altar, his acolytes around him; Confession (NE), the Priest seated, the confessee watched over by angels, another candidate waiting at a shriving bench beyond; Confirmation (N), a relatively simple arrangement where a Priest confirms and an acolyte on the right holds the holy oils in a chrismatory; Baptism (NW), a satisfactorily busy gathering around a font, the baby about to be totally immersed; Crucifixion (W), the extra panel, the grief of Mary being captured particularly well; Last Rites (SW), the dying man's ribs showing as he lies partly covered in an angled bed, his wife kneeling at the head; Matrimony (S), the Priest reading from a Missal, and Holy Orders (SE), with a Bishop ordaining kneeling candidates.

As I said before, this is a church which unfolds as you walk around it, and to stand in different places is to see it in a new way. From the west, your eye is drawn to the light filled crossing with the modern nave altar beneath it. Standing there and looking back, the font is grail-like in the vastness of the west end. But it is at the crossing that the complexities of this building begin to reveal themselves, and you can do no better than to start by looking up.

The vast square space above is filled with white light, and enclosed by the happy juxtaposition of stone arches and bare white walls. So many big churches style themselves 'the Cathedral' of this, that and the other, but here it really does feel as if we might be in a small cathedral somewhere. And then, around, the rich complexity of a mature liturgical space, redolent with the imagery and purpose of its Catholic past and protestant present. On the one hand, in the south transept, a pretty little chapel, simple and prayerful, partitioned off by the late 15th century screen which survived the collapse of the tower at Oxborough. In 1949 it was excavated from the rubble and installed here, and even the curiosity of its alignment does not detract from its pleasing symmetry.

There are just six painted panels, of which four are clearly diescernible and a fifth identifiable from a fragment. They show St Thomas of Canterbury, St John the Evangelist, St John the Baptist, St Withburga and the perfume pot of St Mary of Magdala.

Facing east, the chancel furnishings are a solid example of early 20th century Anglo-catholic enthusiasm. Across the crossing is the memorial to the poet William Cowper. Cowper's work is little known today, his name registering on the English Literature radar rather more prominently than any quotations of his. He was an angst-ridden manic depressive, who sought the company of gentle people and gentle animals - he kept pet hares, and would not answer the door in the evenings when his animals were given free range of the house. His longer verse epics are tedious, but he had a magical touch on a small scale, the master of a well-turned line. His was a distinctly English voice, a militant protestant who was an influence on the militantly Catholic Manley Hopkins and the militantly agnostic Larkin. His good simple verse is also owed a debt by the likes of Hardy and Auden, and his letters and diaries are a sheer joy to read. His 1802 memorial by John Flaxman consists of an austere tablet topped by a palm branch, the bible and a copy of one of those verse epics, The Task. The window above, by Heaton Butler and Bayne in 1900, is much better, not least because it features his beloved hares.

Another militant protestant remembered at Dereham is George Borrow, whose plan to secretly sell bibles to illiterate peasants in Spain was foiled by the joy in his heart at a beautiful valley or turned heel of a peasant girl. Dereham was his home town, St Nicholas the venerable church of this pretty, quiet town.

Perhaps the most famous person associated with Dereham is St Withburga herself, a shadowy figure claimed as the sister of St Etheldreda, who supposedly fled to Dereham after the death of her father King Anna at the battle of Blythburgh. The monks of Ely supposedly stole her body and dragged it off to Ely. As a son of Ely myself, I feel a bit defensive on their behalf when I hear this story, especially as a claim is also made for St Withburga by the church at West Dereham, some twelve miles off. Whatever, the Reformation would have seen the destruction of her relics anyway. There is a sunken spring in the churchyard known as St Withburga's well, the structure a 19th century restoration of what may have been a 14th century grotto, itself almost half a Millennium after the battle of Blythburgh. But Norfolk people have long memories.

Simon Knott, June 2006